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24 June 2021

How to get the best energy deal

One of the easiest ways to cut your gas and electricity bill is to make sure you get a good energy deal in the first place. Find out how to choose the best tariff for you.
Which?Editorial team
Electricity bill_used 451912

Choosing the right tariff could save you several hundred pounds a year. 

The more you know about the kind of energy tariff and features you’re looking for, the more likely you are to find an energy supplier and deal you’re happy with.

Once you've read our tips, use Which? Switch to compare gas and electricity prices and see how much money you could save.

Compare gas and electricity prices to find the best deal

Price comparison websites are the most popular way of looking for energy deals. Over half of switchers used them, according to our latest research. Going directly to an energy company is the next most popular.

Most popular ways to switch energy firm

New automatic switching services are only used by a small proportion at the moment – the same number of people said they switched after being approached by a salesperson either in-person or by phone.

Keep reading to find out about each switching method, including its pros and cons. Plus, keep in mind how easy (or not) those who switched using each method found the process.

How easy did you find the switching process?

Price comparison websites

These display a range of tariffs in price order, but they don’t have to show every available tariff on the market. So if you don’t venture beyond a comparison site's initial recommendations, you might miss out on the cheapest tariffs.

When you use a price comparison website, remember the following:

  • Some tariffs are exclusive to one price comparison website
  • Some tariffs are available only directly from the supplier
  • Some price comparison websites show a limited selection of tariffs upfront - for example only those they can switch you to directly, or just deals from the biggest companies. 

Check what the site says about which deals it displays automatically; you may be able to use the site's filters to see a wider range of deals than is initially displayed.  

Bear in mind that you will need to contact the supplier directly if you pick a deal the website cannot switch you to.

Our independent energy price comparison service, Which? Switch, automatically displays deals that it can’t switch you to directly – so you know you’ll see the best deals and where to get them from.

Energy autoswitching services

Automatic switching services do more of the legwork for you than price comparison websites. They continuously compare and, with your permission, switch you to deals they calculate to be the best (based on information you provide) to keep you on a good rate.

Well-known names include Flipper, Look After My Bills, Switchcraft, Switchd and Weflip, though more are launching all the time. If you want a better energy deal with minimal effort, they could be worth a try. But be aware that you may not get the very cheapest deal on the market. 

Before using an autoswitching service, check the following:

  • Its terms and conditions, so you know how they pick which tariffs to switch you to. 
  • The energy suppliers it works with. Some autoswitching services don't compare every deal available. If owned by a price comparison website, for example, they may only display deals from companies they have financial agreements with.
  • Its policies on switching you to companies with a poor reputation for customer service. Some autoswitching services won’t switch customers to suppliers they don’t feel are up to scratch. They may use external sources, customers’ feedback and their experiences of dealing with suppliers to determine this. This can help you avoid some poorly performing companies, but means you might save less than picking a deal yourself using a price comparison website. See the results of our snapshot switching investigation to find out more.
  • Whether it’s a free or paid-for service. For example Flipper charges £30 per year, and Switchd charges between £1.99 and £4.99 per month, depending on the level of support you want. Sites that charge subscription fees typically cover the whole market, so may include cheaper deals than sites that are tied to specific suppliers, but you'll need to balance this off against how much the fees could eat into your savings. Switchd also offers a free version that only switches you to providers that pay Switchd commission. 

Switching directly with an energy company

It might seem like the best way to get the inside track and the cheapest deals, but some big firms don’t sell their cheapest deals on their own websites. Our snapshot investigation found that this was the case for half of the biggest energy firms in December 2019.

This can be because their cheapest tariff is an exclusive deal with a third party, for example a price comparison website or autoswitching service. To access it, you’ll need to go direct to that service.

Can oil price changes help you predict the best time to switch?

The price of oil is one of the factors that affects the cost of energy tariffs so if oil prices fall energy prices are likely to follow. You can see in the graph below that this was broadly the case over the two years from September 2018.

Although our research has found that it's not usually worth switching more than once a year, if you see in the news that oil prices have dropped in between or you haven't switched for a while it's worth checking whether you could save money by switching at that point.

Oil vs energy prices

Refer-a-friend and switching incentives

Many suppliers are now offering financial rewards for switching to them, including via refer-a-friend schemes that reward both the existing and new customer. In our latest survey of over 8,000 energy customers in September 2020, 10% of people said they receive a financial incentive of some sort from their supplier for recommending others to them. 

If you’re invited to switch via one of these, make sure you check:

  • the price of the tariff you’ll be signing up to – is it the supplier’s cheapest deal?
  • how the price compares with other deals on the market once the incentive payment is factored in
  • whether there are other conditions attached to the switching incentive – for example being a customer for a certain period, or getting a smart meter – and whether you're happy with these
  • if the supplier charges exit fees if you want to leave
  • how good the supplier’s customer service is. Check the best and worst energy companies for 2021.

Fixed and variable energy tariffs: which is best for me?

Energy deals come in two basic types: fixed or variable. Which one would suit you better will depend on how much certainty you want over the price you pay, and how often you want to switch.

Variable tariffs

Often also called 'standard' tariffs, they change price each time your supplier changes its rates. 

Your supplier’s default (or out-of-contract) tariff will usually be variable. So if you have been with your supplier for a while, or didn’t switch after your fixed deal ended, it's very likely that you're on its standard variable tariff or default tariff.

Default tariffs are subject to a price cap. This is effectively a cap on the price charged for each unit of energy – not a cap on your total bill. 

However, some energy firms (generally newer ones) offer variable tariffs that are much cheaper than those from the large suppliers. They too can change their rates, but are still worth considering if you’re looking to pay less without the tie-in of a fixed contract.

Fixed tariffs

These set the rate you pay for each unit of energy you use for a certain period of time (one or two years, for example).

This means that you know the price you pay for energy won’t rise during the period of your contract. If your energy company raises its prices, you won’t be affected – but you won’t benefit if its prices drop, either.

Fixed and variable energy deals' prices compared

Fixed and variable tariffs: which is cheaper?

The very cheapest deals on the market tend to be a mixture of fixed and variable so it’s not as simple as picking one type to guarantee you get the cheapest rates.

But when we checked on 16 November 2020, 41 of the cheapest 50 widely available tariffs on sale were fixed deals.

These tend to be one-year fixed deals – you'll pay the same price per kilowatt hour of gas or electricity you use for the length of the tariff. Energy firms compete to tempt customers to join them on these tariffs, which is why they're attractively priced.

The risk of cheap variable deals is that companies can change the prices if, for example, the price of wholesale energy rises. So the cheap deal you sign up for in the summer might get more expensive in winter.

There's a price cap on out-of-contract of default variable tariffs but it doesn’t mean they're cheap. Often they're not your supplier's cheapest deal and it's worth switching to save money. 

You could save £219 over a year by switching from a deal set at the level of the price cap to the cheapest deal on the market (correct November 2020).

To complicate things further, while most of the cheapest tariffs we found in November 2020 were fixed deals, some of the most expensive ones were also fixed tariffs so make sure you check energy prices before you switch.

Economy 7, Economy 10 and time of use tariffs

Economy 7 and Economy 10 are the two most common time-of-use tariffs. If you're on one of these, you’ll probably have a special electricity meter that provides two different readings (also known as a two-rate meter). 

This will change, though – as smart meters become more widespread, special meters won't be necessary. This will enable all homes with smart meters to access time-of-use tariffs. A few firms are offering these already.

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. You might do this by

  • heating your home with electric storage heaters
  • heating your water during cheap hours
  • running some appliances overnight (though for safety reasons, you shouldn't leave your washing machine, dishwasher or tumble dryer running when you're asleep).

Use less than 30% on the cheaper rate and you might be better off on a single-rate electricity tariff.

If you have a time-of-use tariff and don’t think it’s the best deal for you, all energy companies with more than 50,000 customers must make their single-rate tariffs available to customers with restricted meters. This includes 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. For a faster fix, some suppliers are willing to add the peak and off-peak readings together and charge you a single rate.

Smart meter tariffs

Some companies offer deals that use smart meter readings taken every half hour to offer tariffs tailored to different lifestyles or when electricity is cheapest for the supplier to buy.

Smart meters track the amount of gas and electricity you use, send this to your energy company automatically and show you how much it’s costing you. Find out more about smart meters and how they work.

You might not need to have a smart meter already installed in order to sign up to one of these deals, but it will be a condition of the tariff that you’ll need to get one installed.

Renewable energy tariffs

There has been an explosion in the number of ‘green’ energy deals, since rules were removed limiting the number of deals energy companies could sell at once.

Some of these deals are among the cheapest on the market, while others are among the most pricey. There is no set definition of what a ‘renewable’ tariff must include. 

Some companies play a part in funding or generating renewable electricity or ‘green’ biogas, others simply buy the equivalent of what their customers use in renewable electricity. Companies also offer different proportions of renewable electricity, and some offer other social or environmental perks. See the differences between green energy suppliers.

If you’re keen to support renewable electricity, check your potential supplier’s arrangement.

Default renewable tariffs from Ecotricity, Good Energy and Green Energy UK are not subject to the government's price cap owing to the support they give to renewables.

Find out what is renewable energy and what is green gas?

Should I bundle gas and electricity with broadband or boiler cover?

You can buy multiple services from some energy firms, including broadband, mobile phone packages, boiler cover and smart home devices. The following firms sell multiple products and services:

If you’re tempted to buy more than gas and electricity from your energy company, check whether it would be cheaper to buy the equivalent from separate firms. When we checked in 2018, it usually was.

See the best and worst broadband providers and find out whether boiler cover is worth it for you.

How to avoid exit fees

Before you switch energy supplier, check the terms and conditions of your deal. 

If you want to leave a fixed-term tariff before the end of your contract, you may have to pay an exit fee. But don’t let this put you off. 

  • Not all fixed deals have exit fees. Choose one of these and, if prices go up, you are protected – but if they go down, you can 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 – it's worth asking.
  • Exit fees are usually between £5 and £50 per fuel, so it’s worth working out whether you'd still be better off switching and paying the exit fees.

Change how you pay energy bills to save money

You can sometimes get a discount 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. 

It often costs slightly more to pay when you receive your bill. If you pay as you go for energy, there’s another price cap in place, limiting how much suppliers can charge. Find out more, and whether a prepayment energy meter is right for you.

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.

How to stop your energy company overcharging

Whether or not you've just switched, there are several things you can do to keep your bills accurate.

Send your supplier regular meter readings to make sure you're being charged only for the energy you're actually using. Without these, your energy firm will estimate your usage. If you have a smart meter, it should send these automatically. You can choose between monthly, daily and half-hourly readings.

If you’re billed or pay monthly, and don't have a smart meter, it’s a good idea to send monthly meter readings. Some energy firms will send you reminders to do so, and you can often submit them online.

Know how to read your gas meter and how to read your electricity meter.

Besides sending regular meter readings, follow these steps to keep your energy bills in check:

  • If you think you may be eligible for extra help with your energy bills, check if you can get the Warm Home Discount, Cold Weather Payment or Winter Fuel payment, or a free boiler or insulation.
  • If your energy company increases prices, read your meter and submit the reading on the day the rise takes effect. This way, you get the lower price for the maximum period.
  • Question direct debit changes. If you don't agree with them, contact your energy company and ask it to explain how and why it has calculated the change.
  • If your direct debit payments are increasing, your supplier must give you at least 10 working days' notice before the new amount is 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.
  • If you are disproportionately in credit, ask for a refund. But remember that it's normal to be in credit in the summer if you pay by fixed direct debit.
  • Know the end date for your fixed tariff and switch to a new deal before it expires. This way you’ll avoid being moved automatically on to your supplier’s default tariff, which is unlikely to be its cheapest.
  • Use our letter template to complain to your energy supplier about being overcharged.

For more information, see: My energy supplier has raised prices, do I have to pay?