Online energy plans more competitive
Households who are on online energy plans are paying £140 a year less on average for heating and hot water than those on standard tariffs, according to figures from uSwitch.com, the price comparison and switching service.
The news comes as British households face a double whammy of higher energy prices coupled with harsh winter weather. December was the coldest in 100 years and each cold snap is estimated to add £7 a week on to fuel bills. But, while the typical household now faces an annual energy bill of £1,239 a year, up 3.8% from £1,194 in September, those who are online face an annual bill of £1,010 - £229 a year less.
This difference in cost really shows in the winter, when heating and hot water usage ramps up. Heating accounts for 42% of the average household energy bill, while hot water accounts for 19%. This means that consumers on standard tariffs, who typically pay £1,239 a year in total for their energy are spending £756 a year on heating and hot water alone. However, those who are able to go online pay £1,010 a year in total and see the cost of their heating and hot water fall to £616 a year.
Yet, despite the stark difference in cost, only 13% or 3.5 million households are on online energy plans. While some households may be excluded because they do not have access to the internet, Ofcom stats suggest that 71% of adults in the UK have broadband while 16.8 million households have a broadband connection, which means that many more could be taking advantage of the lower cost of online energy plans.
Tom Lyon, energy expert at uSwitch.com, says: "When winter fuel bills start to hit doormats consumers could be in for a nasty shock. They will be facing the combined impact of winter price rises along with a potential £7 a week additional cost caused by severe cold weather. The concern is that many will react by cutting down on heating and hot water which will severely impact their quality of life whereas they could cut the cost of these essentials by £140 a year by moving online.
"Online energy plans are consistently the most competitive in the market. The difference between the cheapest energy plan in the market and the most expensive standard plan is £402 - this is a substantial saving and could make a real difference for those who are worried or struggling with bills. But even if you can't go online, or don't want to, there are other options available that are cheaper than standard plans so it's still worth looking into."