Watch out for firms that could double your energy bills

The cost-of-living crisis has put millions of people in a difficult financial position. In particular, soaring energy prices are a major worry for many households. Facing mounting pressure to stay on top of skyrocketing bills, it’s only natural for those struggling to look for deals that look cheaper and reduce faff.

What are bill-splitting firms?

Cue: bill-splitting companies. These energy firms allow each tenant in a shared household to set up their own direct debit for their share of the bill and often advertise unlimited energy usage. 

Bill-splitting companies tend to target people like students who are lured by their fixed energy tariffs and the ability to split payments with their housemates.

‘Rip-off’ rates

But an investigation by Sun Money found that using these firms can end up costing households thousands more a year than going through an energy supplier.

Often, they offer unlimited energy tariffs, which mean customers pay a fixed monthly fee instead of paying based on their energy usage. These tariffs can be more than twice as expensive as Ofgem’s price cap.

Customers think they’re getting a bargain, but they’ve often overlooked hidden fees and conditions. For instance, buried in the terms and conditions there could be an energy limit which, if broken, leads to extra charges. 

Huddle, Split the Bills, and Epic Student Bills are among the firms the report warns against.

Comparing the energy costs of different households using bill-splitting firms, the Sun’s investigation found the cheapest average annual bill was from Student Bills Company (around £1,877). That’s still £187.04 higher than the average standard variable tariff.

The most expensive average annual tariff was from Huddle, at about £3,506 (£1,815.68 more than standard tariffs).

Read the fine print

According to the Sun, bill-splitting companies rely on people who are financially struggling and hoping to spend less. The newspaper claims this means they sometimes give unclear or incomplete information about their services to attract new customers.

Arranging bills with housemates can be a pain, especially if you live with near strangers. But is the time saved on sorting out bills and giving meter readings worth the extra money? Before entering a contract, it’s important you understand everything you’re signing up for.

People looking to cut their energy bills have become more of a target over recent years. Find out what signs suggest an offer may be too good to be true and other tips on avoiding energy scams.

Get money advice

If you’re finding it hard to cover essential bills, think about asking for help. 

Effective budgeting can make bills feel a lot more manageable. If you reach out to us, we can create a free budgeting plan for you to stay on top of your costs.

We also give free advice around applying for grants and can talk you through some options if you’re in debt. Some of our debt solutions are free, and others have a fee.

Find out more on our website or give us a call.