Each month we scour the energy market to bring you the top five cheapest energy deals. In January, 15 tariffs cost less than £1,000 and the cheapest deals are getting cheaper.
Energy suppliers are fighting to get the top spot in the league table of cheapest deals. This has meant that each month we are seeing more and more tariffs coming under £1,000.
The majority of these cheapest tariffs are fixed deals. So if you’re on a variable (also named standard) tariff, it is unlikely you’re benefiting from this war on price and are probably paying too much. In fact, if you’re on a variable tariff with one of the big six energy firms, you could be paying well over £200 more than the cheapest deal.
Make sure you’re not paying more than you need to. You can find out which tariff is the cheapest deal for you, based on your energy usage, by visiting our independent comparison site Which? Switch.
Top five cheapest energy deals
Big energy firm Eon launched the cheapest deal on the market on 13 January, ending a long-standing trend of smaller suppliers topping the tables. But Ovo Energy immediately fought back, followed by First Utility. Eon is now in third place:
1. £919.47 First Utility iSave Fixed March 2016 (v44)
2. £920.11 Ovo Energy Better Energy Fixed (online)
3. £922.99 Eon Energy Fixed 1 Year v14
4. £931.99 Extra Energy Fresh Fixed Price Jan 2016 v7
5. £934.98 Extra Energy Clear Fixed Price March 2016 v3
All prices listed above are averaged across all regions and are for a dual fuel customer (gas and electricity) paying by monthly Direct Debit and choosing paperless billing. The annual costs have been calculated using Ofgem medium consumption figures of 13,500kWh for gas and 3,200kWh for electricity.
These are all fixed deals, so they can offer some peace of mind. However, if prices do drop, you won’t benefit while you are signed up. Exit fees may apply if you want to switch before the end of the fixed deal.
Current standard tariffs from the Big Six
If you’re on a standard tariff with one of the Big Six, you could save over £200 by switching to one of the cheaper deals:
1. Eon £1,135: £216 more expensive than First Utility iSave Fixed March 2016 (v44)
2. EDF Energy £1,164: £245 more expensive
3. SSE £1,174: £255 more expensive
4. Scottish Power £1,189: £270 more expensive
5. British Gas £1,193: £274 more expensive
6. Npower £1,205: £286 more expensive
(Figures from Energylinx and accurate as of 16 January 2015.)
Before switching supplier based on price alone, find out more about the energy companies. Our research reveals what customers really think of their suppliers, which companies score best and which energy suppliers you’ll want to avoid – read our reviews of energy providers.
Switch to a cheap fixed deal with no exit fee – so if prices drop in future, you can switch at no loss
Which? energy expert
Are energy prices dropping?
Whether you should get a fixed deal or not is a debatable question at the moment. Wholesale energy prices have been dropping in the last year and suppliers have been accused of not passing on these savings to their customers, by not reducing the prices of their variable (standard) tariffs. On Tuesday, however, Eon was the first supplier to announce a price cut of 3.5% to its gas prices.
Will other suppliers follow suit and drop the price of their standard tariffs? It is likely, but we cannot yet be certain. A safe way to save money would be to switch to a cheap fixed deal now with a small (or no) exit fee. So if the price of variable deals drop to be cheaper than your fixed tariff, you could still move to a better deal.