What are the best power plans for pensioners?

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Co-Author:  Dhayana Sena

Despite being known as the “golden years”, retirement can be difficult for Kiwi pensioners, especially when facing high power bills. For older people, who are at a higher risk of illness, living in cold and damp homes can be deadly.

The Government’s winter energy payment will help pensioners and other beneficiaries, providing extra payment to help with the cost of energy usage. Singles with no children on NZ Super will receive $20.46 a week, while couples will get $31.82 a week, during the winter period.

While the extra payment will help over-65s, it still makes sense to be on the best plan for your energy use – and regardless of the season.

Here is Canstar’s Blue advice on how seniors can make year-round savings on their energy plans.

Low user plans

It doesn’t matter which electricity retailer you are with, if you use a small amount of power each year in your home, you should be on a low-user plan.

Low-user tariffs are protected by law and are designed to help the likes of pensioners, by providing a low daily charge – usually combined with a slightly higher price for each unit of electricity used.

By law, electricity retailers must promote their low-user plans, and many will review the amount of power you use each year to ensure you are on the right plan. There are a few exemptions to these rules, such as homes in remote areas, where a single powerline serves few homes, but the vast majority of superannuants will be able to benefit.

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How do you know if you are a low user?

Most older people will be low users due to the fact that there is usually only one or two people living in their household – even if those people enjoy watching TV or turn the stereo up loud!

Not sure if you’re a low-user? Here is a quick way to check:

Look at your power bill for a winter month, add together the kilowatt hours used that month (you may have more than one meter, such as a separate meter for your hot water cylinder) and multiply by 12. If this is less than 8000kWh, or less than 9000kWh if you are in the southern half of the South Island, then you are a low user.

If you are only slightly over these 8000/9000kWh figures, it usually still pays to be on a low-user plan and you will benefit from any power savings you can make.

Don’t get in hot water over your hot water

Hot water heating makes up a good chunk of your household’s power bill, so it’s worth making savings with your hot water heating where you can. As most pensioners are low-to-moderate hot water users, a hot water cylinder is usually the best way to heat your water.

If you do have a hot water cylinder, you should be able to save money if your cylinder is permanently wired to a separate meter from the rest of the household. This applies regardless of whether you are on a low-you user plan or a standard plan.

Most homes are set up with the hot water cylinder on a separate meter, or able to be controlled separately but, if you are unsure, you can call your electricity retailer or an electrician for help.

Running your hot water cylinder on a night meter is the best way to save money, as it will heat up only at night when electricity rates are cheaper. Before you do this, however, you should ensure that you have enough hot water to last during the day.

If you are unsure about only heating your hot water cylinder at night, at least make sure it is on a controlled rate. This means it can be turned off by your network lines company when needed, such as during peak times or in times of emergency. A controlled rate is offered by most electricity retailers in a majority of areas.

To learn more about hot water systems, have a read of our guide here.

Make the most of your security

Many pensioners are settled in their own homes and don’t plan on moving around; so, it makes sense to cash-in on this security by making the most of long-term plans. Benefits can include a credit amount, discount or price security.

Save with prompt payment discounts – or change your bill frequency

People do not make it to 65 without learning a few tricks of the trade and one of those “tricks” is paying your bills on time to receive a prompt payment discount, if provided by your electricity retailer. However, watch this space, as these prompt payment discounts may not be around forever.

There are many techniques to making sure you pay your bills on time, from scheduling a bill payment with online banking to marking a note on a good old wall calendar.

Read Canstar’s tips for a smoother retirement

If you find you are struggling to pay your monthly power bill on time because you do not have the cash at hand, then you should consider changing the frequency of your bills. A number of retailers offer the option of paying more frequently for your power, so you can better align your bills with your NZ Super payments.

Don’t hesitate to insulate

Heating your home is a large expense, so having good-quality insulation makes your house easier and cheaper to heat properly, as well as, more comfortable and healthier to live in. So, if you are an older person living in your own home, it makes sense to insulate.

The Government programme, Warmer Kiwi Homes, offers grants for 67% of the cost of ceiling and underfloor insulation. Pensioners qualify for this grant if they are living in their own home and have a SuperGold combo card or live in an area identified as low income.

Tell your provider if you are medically dependant

While we all hope to be blessed with good health in our senior years, that is not the reality for many people. If you, or someone living in your home, is dependent on electricity for critical medical support, then you must let your electricity retailer know. This includes if you need power because of age, health or disability and the loss of electricity is a threat to health or wellbeing.

You should also let your retailer know if you have genuine problems paying your power bill due to financial hardship. If you do this, you could be considered a vulnerable customer.

The Electricity Authority ensures electricity retailers stick to guidelines for medically dependent and vulnerable customers, including rules around disconnection. However, retailers cannot guarantee the supply of electricity at all times, and medically dependent customers are required to have an emergency plan in place, in the case of a power outage, such as during a storm.

What is the best retailer for a pensioner?

The cheapest power company for pensioners depends on your location and how much energy you use. Most retailers offer something to benefit older people. Here is a summary of the benefits from major retailers that may suit senior citizens:

Powershop

Powershop offers “Powerpacks” – electricity packs of power that come in a variety of sizes and costs to suit your energy needs. These can either be used now or in the future, depending on your requirements, and are at low prices to help save you money. The further out that you buy packs, for the coming months, the bigger the discount you’ll get.

Therefore, rather than only paying for power when your bill arrives, buying Powerpacks from Powershop gives you flexibility and choice. With bells on!

Electric Kiwi

Electric Kiwi offers “guaranteed savings”, no contracts and one free hour of power every day during off-peak times. The good news for pensioners who are at home during the day is that the free hour of power includes the middle of the day – 9am to 5pm – as well as overnight (9pm to 7am).

Flick Electric

Flick Electric provides customers with access to wholesale power prices, which change every 30 minutes. By monitoring live spot prices, customers are able to save by using electricity only when it costs them less.

Meridian Energy

Meridian Energy offers new customers a $200 welcome credit toward their first bill, as well as the option to choose between guaranteed pricing, which means a fixed charge for the term of the contract, or variable pricing, which does not include a fixed term contract.

Nova Energy

Nova Energy’s Home Advantage Plan gives customers $150 sign-up credit and fixes the rates you pay on electricity until 2021, protecting you from the cost of rising power prices.

Mercury Energy

Mercury Energy customers who sign up online are eligible for a 12% prompt payment discount. Other bonuses include Airpoints. Mercury Energy also has special deals for any customers with electric vehicles.

Genesis Energy

Genesis Energy offers a $100 credit plan if you sign up for 12 months. You can also get a 10% prompt payment discount and Fly Buys points.

Globug

Globug is a prepay power company so customers pay their power bills as they go. There are no penalties or payment fees, and customers can pay whenever they want to. Note: Globug is not suitable for medically dependent customers.

Contact Energy

Contact Energy Everyday Bonus Fixed plan fixes customers’ energy rates until October 2021 and includes a $150 discount off the first bill and a 2% energy discount each month. Customers can also add a broadband plan for $89.99 a month.

Trustpower

Trustpower offers discounts if you bundle your electricity with gas, broadband and/or phone. It also offers a $50 account credit when you sign up online, as well as a joining reward.

While the above provides a brief insight into the features and benefits some energy providers offer, it may be worthwhile to compare energy providers using Canstar Blue’s 2019 review of providers, which has been based on customer satisfaction factors.

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