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.
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.
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.
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:
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.
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:
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 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.
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.
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:
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.
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.
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.
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 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.
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
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.
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.
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.
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 .
If you’re keen to support renewable electricity, check your potential supplier’s arrangement.
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.
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.
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.
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.
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.
Besides sending regular meter readings, follow these steps to keep your energy bills in check: