How to cut energy costs Getting the best energy deal

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Reduce your bills by choosing a dual fuel tariff and paying by direct debit

There are plenty of things you can do to reduce your energy usage - but one of the easiest ways to cut your energy bills is to make sure you on the cheapest deal. Choosing the right tariff could save you hundreds of pounds a year.

Where to find the cheapest energy deals

There are several ways to switch to a new energy tariff, including over the phone directly with an energy supplier and online through a switching site. But which is better?

To see how easy it is to get the best deal over the phone, we called each of the major energy suppliers 12 times in a week and asked for their cheapest tariff. The first time we did this (August 2011) the energy companies failed to offer us their cheapest tariff in nearly a third of the calls. And we were given questionable advice about potential savings, cashback deals and fixed prices.

When we repeated our investigation (November 2011) we saw some great progress - with three suppliers offering the cheapest deal in every call - but British Gas and Eon failed to offer us their cheapest deal in more than half the calls we made. Several salespeople also appeared to quote us prices without VAT - which is misleading.

We are working with the energy companies involved and the energy regulator Ofgem to get these issues sorted out, but for now we think the best way to find the cheapest energy deals is by visiting an independent energy comparison website. Here you can discover all the deals available to you, and can browse the tariff details in your own time. 

How to choose the best energy deal

There are several things to consider when choosing an energy tariff. To get the best deal follow our top tips.

  • Get your annual statement from your supplier or your last year's worth of bills to find the tariff(s) you're on and how much gas and electricity (kWh) you use.
  • Compare the deals available to you and consider paying by direct debit and managing your account online as this will usually earn you a discount.
  • You might consider a fixed or capped tariff to protect yourself from future price rises. But they're likely to be more expensive at first.
  • Before you switch, check the terms and conditions and be aware of exit fees that may apply if you leave the tariff within a set period.

In our telesales investigation we weren't told about the exit fees that applied to the tariffs we were recommended in a third of the calls we made - so if you are speaking to an energy supplier over the phone you should ask explicitly about exit fees. 

Change how you pay to save

You can get a discount off your energy bills if you pay by monthly direct debit. The amount you pay each month will be worked out by your gas or electricity supplier based on the amount of energy you use each year divided by twelve. 

You can prevent your account running up a big debit or credit balance by giving your supplier regular gas or electricity readings.

If you don't want to set up a direct debit and prefer to pay by cash or cheques, some companies offer a discount for paying your bill promptly. It is worth asking your supplier.

Types of energy tariff

There are a huge number of tariffs on the market - here's a quick introduction to the different types available: 

Dual fuel tariffs

Getting your gas and electricity from the same supplier (known as ‘dual fuel’) and paying by monthly direct debit is almost always the cheapest option.

Online energy tariffs

If you choose an online tariff you won't receive bills through the post, but you'll often get a substantial discount for managing your account this way.

Fixed-price energy tariffs

Fixed-price tariffs guarantee the price you pay for your energy for a set period of time and may give peace of mind for those worried about future price rises. 

However, they can be expensive, there may be a fee to leave the tariff early and you won't benefit from any energy price decreases during the fixed-price period.

Capped tariffs

A capped energy tariff guarantees that the unit price you pay for electricity or gas won't rise beyond a certain level for a fixed period, protecting you from price rises. 

The unit price for capped energy is usually higher than a supplier’s standard tariff, but it can go down if your energy supplier cuts its standard energy prices during the period the cap is effective. 

There may be an exit fee if you choose to switch an energy supplier before a capped period expires, so make sure that you check terms and conditions of any capped tariff energy offer before signing up.

Off-peak electricity tariffs

Off-peak electricity tariffs, such as Economy 7 and Economy 10, are best suited to people who use more than 60% of their electricity late at night, such as those who heat their homes using storage heaters.

Switch together for cheaper energy bills

Which? and 38 Degrees are offering you the chance to be part of a UK first – using collective power to get a market-leading energy deal – in The Big Switch. Join before the 31 March 2012 to get cheaper bills.

More ways to cut your energy costs...

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