As the days get shorter, the weather turns colder, and your lights and heating go on for longer, your thoughts may turn to how to keep your energy bills to a minimum.
It’s common knowledge that switching energy supplier can get you a better deal, and finding a better deal is pretty straightforward with help from a price comparison site. Most fixed energy tariffs last a year, so it may seem logical to switch as your energy tariff comes to an end.
But with the cheapest deals changing constantly, you may have wondered if it’s worth switching more frequently. Or, at the other end of the scale, you might have pondered over how much worse off you might be if you switched less often.
We’ve analysed the cost of energy tariffs over the last two years to bring you the (almost) definitive answer, plus explored whether keeping an eye on oil prices could help you identify the best time to switch.
Not sure where to get started with choosing a new energy tariff? Read our guide on how to switch energy supplier.
The energy switching sweet spot
In our scenario, we’ve calculated how much a hypothetical medium energy customer would pay for their energy bills over two years.
We’ve assumed that they switched to the cheapest available deal in September 2018, then calculated how much their two-year energy bills would have been if they’d switched to the cheapest available deal every three months, every six months, once a year, and if they hadn’t switched again.
|Switching frequency||Energy bills in our scenario (over two years)|
|Not at all after the initial switch||£2,050|
|Every 6 months||£1,655|
|Every 3 months||£1,667|
|Table notes: Research is based on Energylinx data using the cheapest widely-available tariff from a supplier that is still trading, averaged across regions, for a current medium energy user (paying by direct debit and using 2,900 kWh of electricity and 12,000 kWh of gas per year), chosen at relevant intervals. All tariffs were taken from those available on the first day of the month. None of the tariffs selected as the cheapest over the two years had any exit fees.|
Switching once a year is probably your best bet
The good news for anyone whose heart sinks at the idea of needing to switch very frequently; based on our scenario, you’d be no better off by switching more than once a year.
Our analysis does, however, prove that switching every time you come to the end of a cheap one-year deal is well worth it, saving our hypothetical energy customer nearly £400 compared to not switching for two years (and therefore ending up on the provider’s pricey standard variable or default tariff).
What about two-year fixed deals?
Opting for a two-year fixed energy deal might seem like a lower-hassle way to save without having to switch so often, but it may not be a financially good bet based on our scenario.
A medium user who signed up to the cheapest 24-month tariff available in September 2018 would have spent £2,053 on energy over the two-year period – much the same as someone who had opted for the cheapest one-year deal to start with, then not bothered to switch again.
Compare gas and electricity prices now using Which? Switch, our independent energy comparison website.
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Why tracking oil prices could cut your energy bill
Switching once a year, every year, is reliable and little effort, and in our scenario it worked out the cheapest option (just), but our calculations are only based on one time period. Sticking zealously to your guns on switching frequency could occasionally mean you miss out on grabbing a bargain when energy prices are at their lowest.
We compared oil prices over the past two years with the cost of consumer energy prices over the same period to see if keeping track of oil prices could help you work out when would be the best time to switch.
We used an average of the cheapest 10 widely available consumer energy tariffs from still-trading energy companies to eliminate any unrealistically cheap deals.
It’s not a perfect correlation by any means but our research shows that when the oil market takes a big dip, energy prices generally follow.
Oil vs energy tariff prices
As we highlighted in a recent news story on the cost of domestic heating oil, there was a very significant drop in oil prices in early 2020, and consumer energy prices dropped substantially along with this. In April, the cheapest deals on the market for a medium user averaged £780 per year (around £200 lower than in late 2018), and both oil and energy prices have been slowly increasing ever since.
So, if you spot that oil prices are steadily tracking down, it could be a good time to check the cheapest deals on a price comparison site. If tariffs are particularly cheap, it may offset any exit fees your current supplier might apply for leaving your deal early.
Keeping track of oil prices is less effort than you think. You can look at oil prices over time on Business Insider, or just keep an eye out for news stories about oil prices dropping and think about switching when you hear about it.
For more ways to cut your energy bills, check out our guide on how to save money on your energy.