Reject energy price hikes to keep bills low

This could buy users several months on the cheaper tariff and, other than the transfer itself, involves writing one email or letter (see the Cheap Gas & Electricity guide)

Many consumers can save hundreds of pounds a year by switching supplier, particularly those on their provider's standard tariff, in addition to any gains from dodging the price rise.

British Gas, Scottish & Southern Energy and Scottish Power have all signalled their intention to raise customer bills over the coming weeks in a combined assault on 13.5 million households.

EDF says it won't increase prices until March, though it hit 1.2 million households with a price jump in October, while Eon and Npower have yet to show their hand.

How the loophole works

Energy regulator Ofgem allows customers to reject price rises as long as they inform their supplier within 20 working days of receiving notification of the increase.

Ofgem suggests you write or email so there is a record of your request.

Users must then initiate the switch within 15 working days of informing their existing supplier they want to leave.

It normally takes six to eight weeks from applying for a new tariff before the switch happens but where the process stalls, it will take longer.

As many power firms are hiking prices, your new firm may also up its charges but you would at least be shielded from the general industry hike for a few weeks or months.

Mark Todd, from comparison site Energyhelpline.com, says: "Anyone hit with a price rise should get their pen or keyboard out and let their supplier know they will be moving."

Power firms can wait 65 days after a price rise to tell customers, though Ofgem wants to reverse this regulation so consumers are given 30 days' advanced notice.

That would water down the benefits of this loophole, though it will prevent consumers who don't switch being hit with retrospective price rises.

How to switch

To find the best tariff, compare the options available via a comparison site (see the Cheap Gas & Electricity guide).

The best deals are available to those who get their bills online and pay by monthly direct debit.

When switching, remember that when a firm describes its tariff as cheapest, it is only best value as a nationwide average.

The energy market is complicated so determining which is the cheapest provider for you depends on where you live and how much power you use.

This is why a comparison, based on your circumstances, is key.

Also, always factor in any exit penalties your existing provider may charge (largely an issue only for those who have recently transferred) when calculating any savings.

Those behind on payments to their existing supplier may not be able to move.

Further reading/Key links

Slash energy costs: Cheap Gas & Electricity Your rights: Fight Energy Direct Debits Boiler protection: Boiler Cover