Why the government says you should be paying less for energy in 2021
Energy prices are falling, but not all consumers are saving. Compare and switch energy providers is one of the easiest ways to cut costs. Photo: Getty
Even though electricity prices have continued to drop, we’re still getting a nasty surprise when we get sent our energy bills.
Compare Club’s Bill Shock Index research found that 85% of Australians experienced ‘bill shock’ in the past three months. Costs from energy providers were significantly higher than anticipated for 40% of people.
Government action is pushing bills down
Fortunately, there’s some relief in sight. The Australian Energy Regulator (AER) has announced a reduced Default Market Offer (DMO) that will cut household energy bills by up to $116 for consumers across New South Wales, South-East Queensland and South Australia.
But — and it’s a big but — the DMO simply caps the maximum price energy providers can charge customers, and is not the most competitive deal you can find on the market.
And even if you’re on a discounted deal, energy providers will often move you to a higher tariff when your discount period ends.
Energy prices are falling, but consumers must compare and switch providers to save. Photo: Getty
Your bill should be lower
Energy prices are also dropping in Victoria. Falling wholesale energy prices mean some energy providers have cut prices by as much as 27 per cent lower than the Victorian Default Offer (VDO).
That’s why it’s vital to regularly compare energy providers to find the best deal that’s available to you. It’s one of the easiest ways to slash your bills.
Compare Club CEO Andrew Davis told finance website YourLifeChoices that households who switch energy providers could save hundreds of dollars.
“Reviewing all your plans once a year is a form of financial ‘hygiene’, and you’ll inevitably feel more in control of your finances and avoid that horrible ‘bill shock’ feeling down the track,” said Mr Davis.
So how much could you save? The Electricity and Gas team are ready to cut your costs today.
This guide is opinion only and should not be taken as medical or financial advice. Check with a financial professional before making any decisions.