According to the Ofgem Retail Market Indicators report, around 62% of households are on standard variable rate (SVR) energy tariffs as of October 2017 – these tariffs are typically the most expensive kind. In the same report, Ofgem said as of May 2018, the average bill for a Big Six supplier is around £1,138 a year, while fixed term deals can start from as low as £788 a year. With around 67% of households getting their energy from one of the UK’s biggest energy suppliers, aka ‘The Big Six’, there’s a good chance you could make decent savings if you switch.
Based on average saving for customers that applied to switch via MoneySuperMarket, March 2018
How to compare energy suppliers
An easy energy comparison of gas and electricity prices and suppliers is the fastest way to see how much you could be saving. A swathe of different UK energy suppliers means there is healthy competition in the market, therefore making it relatively easy to save on your current tariff. However, the scale of what’s out there – at least 54 energy suppliers – means picking the right one for you can feel like a daunting task.
Comparing energy tariffs is simple: you submit a few details about where you live, what type of fuel you use, how many people live in your house or flat, and how often you stay in. Once you’ve entered the info, it’s quick and easy to get a monthly estimate of your energy bills across a whole host of different suppliers.
Once you know what options are out there, it’s entirely up to you if you want to make a switch. And while we’re on that – switching energy suppliers is easier than you might think.
Percentage of households that have a high usage of electricity, according to the information input by customers when switching energy with MoneySuperMarket between April and June 2018. High usage is defined as more than 3,100 kWh during one year.
How much could I save if I switch energy supplier?
According to our data, the average saving for MoneySuperMarket customers that switched in March 2018 was £250. However, the amount saved varies according to a number of factors. For example, if you were to switch from a variable rate tariff with a Big Six provider to a small provider’s fixed rate tariff, then you could save considerably more. Getting your energy from one of the Big Six means you may be paying more than you need to. An average of 65% of users end up switching to a smaller supplier, while only 35% of users switch to a Big 6 supplier*.
Are there any hidden charges or exit fees when switching?
There are generally no exit fees associated with a standard variable rate tariff. However, you might face them if you’re on a fixed tariff and want to switch before your contract ends. Exit fees can vary from £10 to £40 per fuel, but it’s always worth weighing up the cost of exit fees versus future long-term savings.
You shouldn’t have to pay exit fees if you want to switch after your fixed term tariff has come to an end, so it’s worth querying if you’re asked to pay them in this case.
Energy firms must give around six to seven weeks’ notice of the end of your contract, offering you plenty of time to switch.
According to information entered by customers looking to switch energy suppliers between April and June in 2016, 2017 and 2018.
What is the cheapest energy tariff on the market?
Generally speaking, fixed rate deals tend to be the cheapest, while using a prepayment meter could be the most expensive way to pay for energy. As of May 2018, the difference between the market’s cheapest energy tariff and the average standard variable tariff for the Big Six is around £350 (according to Ofgem Retail Market Indicators report). However, new energy tariffs come onto the market all the time so this will vary month by month. You might find the cheapest deal for you is one of the exclusive tariffs negotiated by MoneySuperMarket.
What types of energy tariff can I switch to?
The number of new energy providers on the market has increased significantly, with some now offering niche products that cater for a range of requirements. For example, tariffs can now be chosen by payment structure and by type.
- Fixed (a unit of energy costs the same throughout the year)
- Variable rate (the cost of a unit of energy changes throughout the year, depending on season)
- Single fuel (gas)
- Single fuel (electricity)
- Dual fuel (one bill for both your gas & electricity)
- Prepayment meter (pay-as-you-go for your energy, topping up via a ‘key’ or ‘smart card’)
- Economy 7 (an energy plan that supplies cheaper energy during off-peak, or night-time hours)
- Green energy (the energy you use is ‘matched’ by purchases of renewable energy sources such as wind or solar)
Remember, renters have the right to switch their energy tariff as long as they pay the supplier directly. You might still be able to switch if you pay your landlord for energy, but you would normally have to seek their agreement.
28% of customers moved from a big 6 energy supplier to another big 6 supplier when they switched their energy tariff, and 7% moved from a smaller supplier to a big 6 supplier. 43% of customers moved from a big 6 supplier to a smaller supplier, and 23% of customers moved from one smaller supplier to another.
What is a dual fuel discount?
If your home uses both gas and electricity, you might have two separate suppliers or perhaps even have two separate bills from the same supplier. Some suppliers offer a so-called 'dual fuel' discount to encourage customers to sign up for both gas and electricity. This kind of discount makes the price lower than the cost of buying gas and electricity separately from that provider.
However, it’s important to compare dual fuel deals against the price of getting electricity from one provider and gas from another. You might find that ‘single’ tariff deals work out cheaper overall, but you’ll have two different suppliers, bills and points of contact to deal with.
Percentage of households that have a high usage of gas, according to the information input by customers when switching energy with MoneySuperMarket between April and June 2018. High usage is defined as more than 12,000 kWh during one year.
How do I switch energy providers?
Switching your energy provider is quick and hassle-free: all you need is a recent bill so you can compare prices, and you can switch in minutes. And don’t worry, your energy supply won't be cut off whilst you transition to a different supplier.
Here's how the switching process works:
- Find a recent energy bill or use our estimation tool. You need to know who your supplier is, and what tariff you’re on. If you don’t know your energy usage, our tool will estimate this for you.
- Run a quote & select a tariff. In a matter of minutes you’ll see which suppliers and tariffs could save you the most money. Once you’ve selected the tariff to switch to, you’ll be directed to a confirmation page. This will ask for direct debit details and your meter readings, which helps your new supplier to create a new bill and allows your old supplier to send a final bill.
- Check your old account balance. If you’re in credit when you switch, the money should be refunded to your account automatically, but it’s worth checking for the payment and chasing it up if necessary. Similarly, keep an eye out for any final payments that may be in arrears from your old provider.
- Allow for around three weeks for the switch to complete. Switching is a simple procedure that doesn’t need any rewiring or work outside your property. In fact, you shouldn’t notice any difference apart from lower bills. It typically takes up to 21 days for a full switch, which includes the obligatory two-week ‘cooling off’ period, during which you can choose to cancel the switch free of charge.
How to switch from a prepayment meter
It is possible to switch from a prepayment meter, but some suppliers may charge you for the set up so it's worth checking the small print to see if you could end up paying an upfront cost. Again, it’s worth weighing this cost against future potential savings, as prepayment tariffs tend to be more expensive.
If you are unable to switch from your prepayment meter, you may be able to switch to a better priced prepayment tariff. A quick price comparison will show you the suppliers that could save you money.
Ofgem survey of the Unplugged & On-Standby Segments. Correct as of 2016.
Despite the serious potential savings, more than half (56%) of consumers are put off from switching because they think it’s just too much hassle, according to Ofgem.
Why aren’t consumers switching energy provider?
Ofgem found that there are five main fears that prevent consumers from switching:
- Their cost of energy will go up
- They might not save much money
- They might be charged twice or get a shock bill
- Their energy might get cut-off
- Their new supplier could go bust
Comparing the energy market should ease these fears: you’ll find out if your bills could be reduced and see just how much actual money you could potentially save. When you use an energy comparison tool, you’ll see details of the best offers available and be able to easily select the best supplier and tariff for you.
If you are ever charged twice, you can request a refund – and if you pay by Direct Debit, the money will be put straight back into your account.
Tips for switching energy supplier
When it comes to comparing energy suppliers, you might want to consider more than just price. Helpfully, MoneySuperMarket also gives you a star rating for customer reviews, so if customer service is an important factor, then you can also consider this.
How you use energy could also be a factor. Night-owls might find Economy 7 best for them, while eco-warriors might prefer a green tariff. Whatever you want from your energy, don’t be afraid to make the switch.
And whilst you may consider going with a smaller supplier a risk, it’s important to know that if they were to go bust, you will never be cut-off or without energy. Read more about energy providers and what happens if they go bust.
*Based on average savings for customers that applied to switch via MoneySuperMarket, March 2018