Energy discounts easy to lose and could end up costing $800 a year
Energy companies lure people in with massive discounts, but did you know how easy it is to lose these cheap deals? And once you forfeit them, you’ll automatically pay top rate for your energy usage.
WHY THIS IS INTERESTING NOW: End-of-summer power bills are expensive enough, but imagine peoples’ shock when they realise they’ve lost their discounted rate and have been paying top dollar for their energy all summer.
LARGE DISCOUNTS CURRENTLY AVAILABLE (VIC, NSW & QLD):
- Victoria: Simply Energy’s VIC Simply Guaranteed 27 – offers a 27% discount if you receive your bills via email and pay them via Direct Debit. This discount comes off your total bill (usage and service charges). For a typical family living in Melbourne (3000), this discount equates to potential savings of $798 per year.
However, be aware that if your direct debit bounces, then you’ll lose this discount and be charged an additional $200 on your next quarterly bill.
- NSW: Origin’s Daily Saver Plan – offers a guaranteed 9% discount plus, which you can bundle with an additional 1% direct debit discount. This combined 10% discount will only apply to your usage charges, your daily service charge will remain the same. For a typical family living in Parramatta (2150), this discount equates to potential savings of $193 per year.
Origin’s guaranteed discount is not dependent on certain behaviours so is a safer bet than behavioural discounts, but because of this, these kind of discounts offer much lower savings.
Origin’s eSaver Plan – offers a 15% discount if you pay-on-time, and an additional 1% direct debit discount. This combined 16% discount will only apply to your usage charges. For a typical family living in Parramatta (2150), this discount equates to potential savings of $309 per year.
However, be aware that if your direct debit bounces, then you’ll lose this discount and be charged an additional $77 on your next quarterly bill.
- Queensland: Energy Australia’s Flexi Saver offers a 10% discount if you pay-on-time. This only applies to your usage charges. For a typical family living in Logan (4114), this discount equates to potential savings of $213 per year.
However, be aware that if you fail to pay on time, then you’ll lose this discount and be charged an additional $53 on your next quarterly bill.
BACKGROUND ON DISCOUNTS: Typically energy companies offer two types of discounts:
- Guaranteed discounts which act as an incentive to join the energy plan (these are generally around 3 – 4%), and
- Behavioural discounts which you’ll be awarded if you do certain things, such as pay-on-time or pay by direct debit (these can be as much as 27%).
If you’re tempted by a discount offer, then check if it’s guaranteed or based on certain behaviours. If it’s ‘behavioural’ then be aware that if you don’t stick by the rules, you’ll lose the discount and you’ll pay the full rate on next quarter’s bill.
Something as simple as not having enough money in your account when the direct debit comes out (which has happened to all of us – especially around the festive season) will cause you to lose your discount AND you could have to pay a fee because your direct debit bounced.
TOP TIPS ON GETTING THE BEST DISCOUNTS: When comparing energy plans and discounts,
- Check if your discount comes off your total bill or just your usage charges. You’ll save a lot more if it applies to the whole bill (which is usage and service charges).
- Check which discounts are guaranteed and which are behavioural-based. Guaranteed discounts are preferable but they’re often a lot lower than behavioural discounts.
- Try and bundle your discounts to get the best deal possible. Some energy companies will offer a guaranteed discount, as well as a pay-on-time discount and a direct debit discount.