With temperatures dropping over recent weeks, many of us will be cranking up the heating.
If you’re worried about how much this will cost you, it’s worth checking whether you’re on the cheapest possible energy tariff and switching to something better if you’re not.
Introducing energy price caps
Earlier this year, Ofgem announced an energy price cap that could save over 11 million households around £75 a year.
The proposed price cap of £1,136 a year for a typical household will kick in from 1 January, 2019, and energy suppliers will have to cut their default tariffs and standard variable tariffs (SVRs) to this level or below.
Over half of households in Great Britain are currently on default tariffs – usually the tariff you’re put on once your existing deal ends.
But while millions of households are expected to benefit, how much you actually save will vary depending on:
- how much energy you use
- whether you pay by monthly direct debit
- where you live.
How to save even more on your bills
Rather than relying on the energy price cap to reduce your bills, you can enjoy even bigger savings by shopping around and comparing energy deals yourself - especially given the number of price hikes we’ve seen this year.
In fact, typical users can save up to £250* a year by switching away from a standard variable rate tariff with a ‘Big Six’ provider to a deal with another supplier. That’s significantly more than £75.
Stephen Murray, energy expert at MoneySuperMarket, said: “The price cap will deliver a short-term saving for those customers who are currently sitting on expensive SVRs that are currently priced above the level of the cap.
“The important thing to understand is that the much publicised cap level of £1,137 per year (if you pay by direct debit) is only a nominal figure. It actually represents an average across the whole country at average usage. So, if you are on an SVR and currently pay £1,500 per year, then your bill is not going to come down to £1,137.”
He continued: “The calculation on which the price cap is based is refreshed twice a year and the next update (to come into effect on 1 April, 2019) shows very clearly those same customers who may be happy with a reduction on 1 January, will be experiencing a price increase in April.
“Our advice continues to be don’t leave yourself open to the variability of price changes and switch to a fixed deal instead that will save you double the amount that the cap is promising.”
Top energy tariffs
It takes just minutes to run an energy quotation on our site and a few minutes more to get the ball rolling.
Your switch should be complete within 21 days and there will be no need for work inside or outside your property, with no interruption to your supply at any point. All you’ll have to do is send a closing meter reading to your old and new suppliers.
So let’s take a look at some of the cheapest tariffs available:
First Utility - Smart First February 2020 v2
The Smart First February 2020 v2 tariff from First Utility has an average bill value of £1,011 a year, based on dual fuel average Ofgem consumption data.
The tariff is fixed for 15 months (until 29 February, 2020) and is available to new and existing customers, but not those who have a smart meter.
You’ll need to have a smart meter fitted by 31 August, 2019 to qualify for continued tariff rates. Exit fees of £75 for gas and £75 for electricity apply if you leave before 29 February, 2020.
Avro – Simple and Seasonal Fix
The Avro Simple and Seasonal Fix tariff has an average bill value of £1,008 a year, based on dual fuel average Ofgem consumption data.
The tariff is exclusive to Moneysupermarket Group (T&Cs apply) and is fixed for 12 months. It is available for monthly direct debit customers and is for dual fuel tariffs only.
Be aware that fixed direct debit payments will be seasonally adjusted, so payments will be 25% lower in the summer months (May to October) and 25% higher in the winter months (November to April). Yearly costs are exactly the same.
Exit fees of £30 for gas and £30 for electricity apply if you leave before the 12 months are up.
Octopus Energy – Octopus 12M Fixed
The Octopus 12M Fixed from Octopus Energy has an average bill value of £1,019 a year, based on dual fuel average Ofgem consumption data. It is available to new and existing Octopus customers.
The tariff is fixed for 12 months and you can choose a dual fuel or a single electricity tariff. Exit fees don’t apply, so you can switch from Octopus at any time.
You’ll need to manage your account online and be happy to receive paperless billing.
Plus, every Octopus customer on 7 December, 2018 will be entered by Octopus into its free prize draw to win a car. Offer ends 7 December, 2018. T&Cs apply. Click to see Octopus Energy T&Cs for full prizes and eligibility conditions.
Variable rate deals
PurePlanet - 100% Green
If you’d prefer a variable rate tariff, PurePlanet’s 100% Green tariff has an average bill value of £998 a year, based on dual fuel average Ofgem consumption data.
The tariff is available to new customers only and there are no exit fees. Dual fuel customers will receive a £30 discount each year.
Keep in mind that as this rate is variable, it could go up or down.
PurePlanet is an app based company so you’ll need to download the PurePlanet app in order to complete your application and manage your account and bills.
*Based on the average saving for customers that applied to switch via MoneySuperMarket, March 2018