How much could I save by comparing energy prices?
According to the energy market regulator, Ofgem, around 60% of UK households are on a standard variable rate (SVR) tariff. That means they’re on the most expensive type of tariff, regardless of which supplier they’re with.
If you’re on your supplier’s SVR, you could switch to a fixed rate deal and save over £243* a year on your energy bill. But of course, how much you could personally save depends on your home’s energy consumption, and the best way to find out how much you could be saving is to compare deals.
*51% of customers that applied to switch via MoneySuperMarket could save at least £243.67, May 2019.
How do I compare energy prices?
Comparing energy prices is a straightforward process, and only takes a few minutes.
To start, grab your most recent energy bill – we’ll ask you for:
- Your address
- Current supplier’s name
- Current tariff name
Don’t worry if you don’t have a bill to hand. We can still provide a quotation using the supplier that traditionally serves the most homes in your area, together with its most common tariff.
You’ll have a few more questions to answer, such as your property type (terraced, semi-detached, flat, etc), how many people live there, and when people are typically at home. Once you’ve answered these, you’ll be presented with a list of tariffs in price order.
Once you’ve found yourself a better deal, you can select ‘proceed’ and start the switching process once you’ve answered a few more questions. The actual switch will take up to 21 days, and the energy firm you’re switching to will handle the admin side of the process – all you’ll need to do is provide meter readings when asked. There’ll be no work done at your property, inside or out, and there’ll be no interruption to your supply.
Types of energy tariff
When you’re shopping for an energy deal, you’ll see details of several tariff types. The following list will give you an idea of what’s on offer:
- Fixed rate
These tend to be the cheapest deals available.
A fixed rate tariff lasts for a specified period of time, usually 12 or 24 months, during which time the price of each unit of gas and/or electricity is fixed. This means your supplier commits to keeping the price of energy the same for the duration of the deal, regardless of what happens to energy prices generally. But that doesn’t mean your bill will be the same every time – the amount you pay will reflect how much energy you use.
Some fixed rate deals charge an exit fee if you leave before the end of the term. That said, fees cannot be charged if you are within 49 days of your tariff coming to its end.
- Variable rate
These are also known as standard variable rate (SVR) or default tariffs, and are traditionally the most expensive on the market. If you haven’t switched for three years or more, or have never switched, it’s likely you’re on this sort of deal – along with an estimated 60% of the population.
With a variable rate deal, the supplier is at liberty to change the price of the energy you use according to market conditions, leaving you vulnerable to a price hike.
- Dual fuel (both ‘fixed’ and ‘variable rate’ available)
This is where you get your gas and electricity from the same supplier, with a single bill covering both. Dual fuel tariffs usually come with a discount, but it could still be cheaper to get your gas and electricity separately from two suppliers – although you would then have two bills to deal with.
Suppliers also usually charge less if you have an online account and agree to pay by monthly direct debit (rather than quarterly by cheque or cash).
A prepayment tariff is where you pay for your energy in advance using a special meter, rather than in arrears via a monthly or quarterly bill (where you have a ‘credit’ meter). Many landlords fit prepayment meters for their tenants, and they are sometimes installed where customers have struggled to pay their bills.
Old-fashioned prepayment meters accepted coins, but today’s versions use plastic keys or cards that can be topped-up at a shop or post office, or online.
If you’re on a prepayment meter, you can still shop around for a better tariff, although if you’re a tenant you would need your landlord to agree to the switch.
You can also move from a prepayment meter to a credit meter if your supplier agrees.
- Economy 7 /10
These tariffs charge you different amounts for your electricity depending on the time of day or night. You’ll be on a cheaper rate for either 7 or 10 hours (depending on your tariff) during the night and on a more expensive rate during the day. If you can run all your appliances (such as your washing machine and dishwasher) during the cheaper hours and have night storage heaters that top-up during your cheaper rate hours, this sort of tariff can work out to be better value than a flat-rate tariff.
You can run a price comparison for economy hours tariffs – just make sure you tell us which sort of meter you have. You can also talk to your supplier about moving to a single-rate credit meter, although you may be charged a fee for the change to be made.
Environmental concerns are high on the agenda for many of us, and that means there is plenty of demand for so-called ‘green’ energy tariffs – ones that promote the use of wind and solar-generated renewable power at the expense of traditional carbon-based fuels such as coal and natural gas.
If you have a green tariff, you will still get the same gas and electricity through your pipes and wires as someone with a traditional tariff, with a proportion of it inevitably produced by burning fossil fuels. The difference is that your supplier will commit to buying renewable energy to reflect the amount you use, with that being fed into the national grid.
That way, you increase demand for renewable fuels. The more people take out green tariffs, the more the national balance will shift towards green alternatives.
Business energy savings
It’s not just households that could save money by switching energy suppliers. Many businesses are on what’s known as ‘rolling contracts’ – while this can save you time and stress, often your supplier will place you on a more expensive tariff, which means you might be paying more than you have to for energy. But with MoneySuperMarket all you need to do is give a few details about your business energy usage and location and you’ll be able to find a better deal.