You can save around £434 in a year on gas and electricity – the biggest saving we’ve seen for over two years – but the list of energy companies under investigation for potential wrongdoing is growing.
All of the Big Six energy companies, and many smaller ones, have announced increases to their customers’ bills. So now is the time to find yourself a cheaper deal before the price hikes make a dent in your bank balance.
To take advantage of the cheapest deals, you no longer have to tie yourself into a contract with exit fees to encourage you to stay put.
Four of the top five cheapest deals this month are variable tariffs; so they have no exit fees and you can sign-up and leave the tariff when you wish.
But when you’re picking a new deal, watch out for the companies under scrutiny from energy regulator Ofgem – it announced a new investigation into Utility Warehouse last week.
Read on to find out more about the pros and cons of variable deals, which companies are being investigated, and the top five cheapest gas and electricity deals available now.
Compare gas and electricity prices with Which? Switch, our independent comparison site, to see how much money you could save on energy. Or you can call us on 0800 410 1149 or 01259 220235.
Cheapest gas and electricity deals for June
May saw the biggest difference between the cheapest deal (available GB-wide) and the priciest Big Six standard tariff in two years, based on our monthly analysis. Following the price rises announced by the Big Six in the last few weeks, June’s potential saving is even bigger.
Switch from Npower’s standard tariff (which will be the priciest Big Six standard variable tariff following its price rise on 17 June), and you’ll be paying £434 more per year than you would be with the cheapest tariff on the market.
So if you’re on this Npower tariff, you could save £434 in a year by switching.
Npower’s standard variable tariff will cost £1,230 per year for the average user*, compared with the £797 cheapest deal available in England, Scotland and Wales.
Below we’ve listed the five cheapest dual-fuel energy tariffs for medium users. Use these prices to get an idea of what you need to spend – but compare prices using your own usage information to get the most accurate quote.
The prices above are annual. We’ve also noted the tariff and how much each tariff will save a medium user compared with Eon and Npower’s standard tariffs (the cheapest and priciest of the Big Six firms, taking into account announced price rises).
Variable or fixed energy tariff?
Energy companies constantly compete to offer customers the cheapest deal. The lowest price puts a company in the top spot when you compare energy prices using a price comparison website.
In the past, the cheapest deals were often fixed tariffs which usually came with exit fees. Exit fees are payable if you choose to switch during the term of your fixed contract. We’ve seen exit fees of up to £50 per fuel. Not all fixed-term tariffs come with exit fees.
But with variable tariffs, you don’t have a set length contract and nor do you have to pay exit fees. We’ve seen more variable tariffs among the cheapest deals in the past few months. So you can sign up and switch away without being penalised.
However, companies can also change the price of variable tariffs, as the British Gas price rise, EDF Energy price rise, Npower price rise, Scottish Power price rise and SSE rise in the past few months all show.
Energy companies under investigation
Last week, Utility Warehouse found itself under investigation by energy regulator Ofgem for the way it handles customers who are in debt. Ofgem is looking at whether it broke rules on:
- giving indebted customers appropriate repayment plans
- doing enough to contact those at risk of building up debt
- installing pre-payment meters appropriately to recover debt from customers, especially under warrant.
It’s not the only energy company currently under investigation by Ofgem, however. In 2018, Ofgem has announced the following:
- Iresa is banned from taking on new energy customers until it has resolved problems with its customer service. Last week, Ofgem said Iresa ‘has not taken adequate steps’ to improve so it cannot acquire new customers, ask customers for one-off payments, or increase customer direct debits before 27 June.
- Iresa is also being investigated separately for its customer service, including treating customers fairly on the phone, when handling complaints and letting customers switch supplier.
- Ovo is facing scrutiny over the energy consumption information it gave customers last winter.
- Economy Energy, E, and consultancy Dyball Associates are alleged to have ‘prevented, restricted and distorted competition amongst energy suppliers’. Ofgem says the two energy firms agreed not to target each other’s customers through face-to-face sales between ‘at least’ January and September 2016.
Our energy pricing research
*Prices are based on a dual-fuel tariff available in all regions in England, Scotland and Wales for an average user (using Ofgem averages of 3,100kWh of electricity and 12,000kWh of gas per year), paying by monthly direct debit, with paperless bills. Data is from Energylinx. Prices given are averages across regions, are rounded to the nearest whole pound and correct on 4 June 2018.