Staywarm Is It Worth It?

Staywarm is the unique gas and electricity provider which any home with someone aged over 60 in it can access. Its big advantage is you're told the price you'll pay for a year and this is fixed, no matter how much gas and electricity you use. Once a powerhouse deal, recent changes means it's no longer best for all. So should you ditch and switch?

• StayWarm: The Basics
• How the usage bands are assessed
• Is StayWarm worth it?
• Why has it changed?
• Other articles/Discuss

StayWarm - The Basics

Staywarm is a special tariff from E.ON for any home with someone aged over 60 living in it. It only offers dual fuel, meaning it must supply your electricity and your gas (if you have it).

The key difference between it and all other providers is the bill doesn't depend directly on the energy specifically used, you pay a fixed tariff over a year; this gives peace of mind that turn the heat up and you won't pay more. Yet high users and houses with more than 3 bedrooms or four occupants are excluded.

StayWarm isn't what it used to be

Until September 2006, StayWarm's prices were based on three criteria; the bedrooms in your home, the number of people living there, and the region you live in.

Now, sadly the price you're given will incorporate usage. This means within each criteria combination you're allocated one of three usage bands, effectively low, medium and high use. For example if you're a one room, one person mid-user, you'll pay more than the same category low user.

It's important to note though that once this price is set, it is fixed for the year, regardless of how much energy you use; which is still radically different from any other provider.

How does it allocate the usage bands

This differs for new and existing customers.

• Existing customers. Rather simply, at the annual renewal it will look at your energy consumption and categorise you that way. It will also offer high user band people advice on how to cut energy needs.

• New customers. Here the ‘usage assessment' is based on the answers given to a series of questions. It's important to note StayWarm won't allow new customers assessed as ‘high usage' to have the service.

Many people who are assessed as high users tend to get upset about it. Don't think it means you're a ‘huge power guzzler' though, it's simply based on average definitions from Ofgem the regulator.

Unfortunately there's little you can do to get StayWarm to change its assessment, it's a commercial company and if it doesn't want you as a client, it doesn't need to have you. High users (or actually anyone) should pay a quick visit to the Energy Saving Trust info pages.

What is high usage?

For those that have a good idea of their consumption rates StayWarm uses the following thresholds to class the lowest high user, which they won't accept onto the tariff at present.

To find out your usage, look at your energy bills over the last year, this should detail your usage.

• 28,000kWh of gas and/or
• 4,950kWh of electricity on an unrestricted meter or;
• 9,900kWh of electricity on an Economy 7 meter per year

Is StayWarm worth it?

Staywarm is still a very different tariff, with the huge advantage that you know what you will pay for the year, regardless of usage. Yet at the end of the year, you may face a price rise based on the prior usage. At that point you need to carefully consider whether it continues to be worth it.

Those people at the higher ends of each usage bands will do well out of the system (e.g. you're nearly but not quite in the high use category, so still get charged mid-use) others less well

How to compare with other providers

StayWarm has never been a de facto ‘the cheapest' provider and always needs comparing to the best of the rest.

• New customers considering Staywarm. Sadly you can't use a free comparison service to do this for you as none include Staywarm in their results table (although as explained below one does allow existing customers to compare). Therefore the first step is to find out if it'll allow you to be a customer and at what price.

  So having done this; then compare the price it'll charge with the amount you would pay at the cheapest standard provider found by a comparison service (see the main Gas & Electricity switching article for more). If If StayWarm isn't over 5% more costly than others, then it's worth going for, for the peace of mind of the fixed fee.

• Existing Staywarm customers. StayWarm customers shouldn't consider it a sacred cow. It's important to do a check each year to see if you're getting a good deal; in much the same way as new customers should.

  The only free gas & electricity comparison service that allows existing Staywarm customers to compare it with other providers is UK Power* To compare, enter ‘Staywarm' for your current tariff, then plug in your annual energy consumption and how much you pay. The site works out how much you'd pay with other providers.

  If it can switch you, UK Power pays £15 cashback per new supplier (ie £30 if you switch to separate gas and electricity suppliers or £15 for duel fuel). Read the full Gas & Electricity Switching article for more info on how cashback works.

Why was StayWarm changed?

While the Staywarm brand was originally set up as a quasi-social initiative, once its parent company was taken over by Powergen and then E.ON, a change was always likely. In 2005, the company started blocking high users and investigating its own pricing structure.

I believe it would politically bad for E.ON simply to close StayWarm down, many would kick and scream about it (me included); therefore by gradually morphing it into a more costly tariff, it's probably lessening the impact on its profitability.

Ultimately, E.ON is a company not a charity, and has a right to make changes. There are a good number of people who will benefit hugely from StayWarm's unique ‘peace of mind' driven pricing structure. My hope is they will keep benefiting, and those who no longer benefit from StayWarm will ditch and switch just like any other provider.