How to save on your energy bill
Getting the best energy deal
Article 2 of 6
Getting the best energy deal
One of the easiest ways to cut your bills is to make sure you get the best energy deal in the first place. Find out how to choose the best tariff.
Choosing the right tariff could save you hundreds of pounds a year. You can use our independent switching service, Which? Switch, to compare gas and electricity prices.
The more information you give a price comparison service, the more accurate your quote will be. Use these tips to make sure you're offered the very best deal for you.
Once you've read our tips, then use Which? Switch to see how much money you can save. As Which? is a not-for-profit organisation, any money made by Which? Switch helps fund our campaigning activities.
Find out how much energy you use
Use your annual statement from your energy supplier or your last year's worth of bills to find out:
- the name of the tariff(s) you're on
- how much gas and electricity (measured in kilowatt-hours – kWh) you use.
Figures from your annual bill will get you the most accurate results when searching for a new tariff. But if you're not able to find this out, you can estimate your usage. See our guide to estimating how much energy you use.
Look for the best energy deals
Once you've given a comparison site your information, you'll be able to compare the deals available to you. If you want the same supplier for your gas and your electricity, then a dual-fuel deal will nearly always work out cheaper because of the dual-fuel discount.
But sometimes you can save more by taking gas and electricity from two different suppliers. In our research, taking the cheapest gas deal and the cheapest electricity deal from different suppliers meant you'd pay around £20 less a year than the cheapest dual-fuel deal on the market (based on data from February 2017). So it's worth looking at both options.
Fixed or standard tariff?
A standard tariff (also known as a ‘variable’ tariff) is your supplier’s default tariff. If you have been with your supplier for a while or didn’t switch after your fixed deal came to an end, it is very likely you are on it.
The cost of standard tariffs will go up and down each time your supplier changes its rates. They're usually a supplier's most expensive tariff.
Fixed tariffs, on the other hand, have their rate fixed for a certain period of time (one or two years, for example).
Our exclusive research found that from 2015 to 2017, the cost of standard tariffs across all suppliers UK-wide decreased on average by 3% (or £33 per year). While fixed deals dropped by 0.5% on average (or £5).
But this doesn't mean standard tariffs are cheaper. Quite the contrary - fixed deals tend to be cheaper than standard tariffs. It's more likely that fixed tariffs are more keenly priced, so suppliers can't afford to reduce them by as much.
We've found that fixed deals are, on average, 4% cheaper than standard tariffs. In fact, our analysis of energy tariffs has found that customers of the Big Six energy companies who are on a standard tariff could save around £260 a year by switching to the cheapest deal on the market.
If you're on one of the Big Six energy firms' standard tariffs, you could save around £260 by switching.
So if you’re on a standard tariff, you need to switch. Click to use Which? Switch and compare gas and electricity prices.
Time of use tariffs
Economy 7 and Economy 10 are currently the two most common time of use tariffs. If you're on one of these tariffs, you’ll probably have a special electricity meter that provides two different readings. Although this will change - you won't need a special meter as smart meters become more widespread.
Time of use tariffs charge different rates for electricity used at different times of day. For example, a more expensive rate for electricity used at times of peak demand in the daytime, and a cheaper overnight rate.
Economy 7 gives seven hours of cheaper electricity; Economy 10 gives 10 hours.
To make the most of these tariffs, you need to use a certain proportion of electricity during the cheaper hours. Such as heating your home with electric storage heaters or heating your water or running appliances overnight. Use less than 30% on the cheaper rate and you might be better off on a single-rate electricity tariff.
From 1 September 2017, all energy companies with more than 50,000 customers must make their single rate tariffs available to customers with restricted meters, including Economy 10 meters and white meters. If you think you’d be better off on a single rate tariff, and your meter needs changing to make this possible, your supplier cannot charge you to install a new meter.
Before you switch energy supplier, check the terms and conditions.
If you want to leave a fixed-term tariff before the end of the contract, you will usually have to pay an exit fee. But don’t let this put you off:
- Some of the cheapest deals on the market have no exit fees, despite being fixed deals – so why not switch? If prices go up, you are protected; but if they go down, you could always switch at any time at no cost.
- Your supplier can't charge an exit fee if you switch in the last 49 days of your fixed tariff.
- You should not have to pay exit fees if you’re moving home, provided you keep your tariff but just change the address.
- If you switch tariff but stay with the same provider, some may waive the exit fee. So ask.
- Most fixed deals have exit fees of between £5-£30 per fuel, so it’s worth working out whether you could still be better off switching and paying the exit fees.
Change how you pay for energy
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. It's based on the amount of energy you use, or are likely to use, in each year, divided by 12.
If you’re happy to view your bills online, opt for paperless billing. Requesting paper bills will often add to the cost of your tariff.
Keep your energy bills in check
Whether or not you've just switched, there are things you can do to keep your bills accurate and to stop you being overcharged.
Give regular meter readings
Make sure you give regular meter readings to your supplier, to make sure you're being charged for the energy you're actually using, rather than an estimate.
Take a look at our guide to understanding your bill to make sure you're paying the right amount.
Avoid being overcharged
- If your energy company raises prices, read your meter on the day the rise takes effect. This way, you get the lower price for the maximum period.
- If your bills are based on an estimated reading, regularly check them against your own meter readings. If different, contact your supplier.
- Question direct debit changes. If you do not agree with the proposed changes, contact your energy company and ask for further clarification. Remember that it's normal to be in credit in the summer.
- If you are disproportionately in credit, ask for a refund.
- If there are going to be changes to your direct debit, your supplier must tell you why. If your payments are going up, it must give you at least 10 working days notice before it’s debited - either by a separate letter or email, or as a note on your bill. If it doesn’t, complain and ask for compensation. You can also make a claim under the Direct Debit Guarantee.
- Use our letter template to complain to your energy supplier about being overcharged.
For more information, see our five tips to avoid your energy company overcharging.