Right Price vs Good Price

Have you seen in the news about energy companies going bust and failing to deliver on the customer service they have promised? 

This is because the rate that they charge for your energy is too low for the market. When I was growing up I was taught about the right price; not paying enough could mean the product or service is not good enough and paying too much could mean you are over paying for something which may not be value for money. However there is always an exception to the rule in some circumstances.

So what should you be paying for your gas and electricity?

Well the current market value for electricity is between 16 pence and 17 pence per kilowatt and the current market value for your gas is between 3.3 pence to 3.6 pence so anywhere between these rates would be an acceptable amount to pay for your gas and electricity supply.

So what happens when a company offers you electricity under that market value?

Well this depends on the company that is offering the deal. If the company is not a household name then a buyer should beware as this company is very unlikely to be making a profit. It could be potentially putting the business at risk and so you could then find yourself dealing with a totally different supplier. What sometimes happens is one of the big six will offer you a below market offer but just like when you go to the supermarket an offer can only last for a few months. This could also be true in the case of your gas and electric offer. The fact is that most likely your new fantastic deal will be a lot more expensive than when you signed up to it in the first place. If the price is above the market value then you simply need to find another supplier with a better deal as you are wasting your money and that money could then be spent on something else that you choose of better value.

So what can you as the consumer do about this?

Do your research on the company. The best research tool is companies house this will give you all the accounts that this company has produced over the last few years. Use sites like Which magazine and Moneywise as this will tell you who has been naughty and who been nice.

I hope this has been useful and insightful to read and if you would like to talk about the cost of your energy please feel free to get in touch.