Energy prices are the lowest they’ve been for many years so unless you’ve switched supplier recently, you could be shelling out hundreds of pounds a year more than you need to.
A record 6.4m people switched energy supplier in 2019, according to data from Ofgem, the government regulator for gas and electricity markets in Great Britain, with a further 1.6m switches made so far this year.
According to comparison site Energyhelpline.com, switching saves most households between £200 and £300 a year, yet there are still millions that stick with the same provider year after year. A survey by Ofgem found around one in three (29%) people said they’d never changed their supplier – perhaps because they’ve never realised how easy and safe it is to do.
Here, we explain why switching is so important, how much you could save, and how the process works.
Why switch gas and electricity provider now?
There are several reasons why switching now might benefit you.
1. Energy prices are at a three-year low
Falling oil prices in recent weeks have resulted in lower wholesale energy costs, which has led to suppliers launching some of the most competitive energy deals ever seen. This is great news for households, but these deals are unlikely to last forever, so it’s worth taking advantage while you can.
2. We’re using more energy than usual
Even though our energy consumption usually falls during the spring and summer months, the fact that most of us are now working from home means we are likely to be using more electricity than usual. Energy costs could rise for some as a result, so it’s vital to try and keep costs to a minimum by moving to the cheapest possible tariff.
Stephen Murray, energy expert at comparison site MoneySuperMarket.com, said: “With everyone spending more time at home as a result of the coronavirus lockdown, we’re using more domestic energy than normal for this time of year – with some suggesting increases in the region of 10%.”
3. You can easily beat the energy price cap
In January last year, Ofgem implemented a cap on the price of default tariffs to protect consumers who don’t switch suppliers from overpaying for their energy.
The default tariff – otherwise known as the standard tariff – is the tariff you usually roll onto automatically when any special energy deal you signed up for finishes. It tends to be much more expensive than other tariffs.
The price cap limits the amount suppliers can charge for this tariff and is updated twice a year. On April 1, it fell by just £17, so that the maximum that a typical dual-fuel household (who gets their gas and electricity from the same supplier) will pay is £1,127 a year.
Whilst this might feel like you don’t need to do anything to benefit, the reality is that it’s easy to beat the price cap by moving, so if you’re currently on a default tariff you should move as soon as you can. Sarah Broomfield, energy expert at Uswitch.com, said: “Our data shows that some households on suppliers’ default tariffs could save up to £404 a year, with the gap between the price cap and the cheapest deal the highest it has been for seven months.”
4. More than 100 fixed tariffs are ending soon
If you signed up to a fixed energy tariff a while ago, your tariff could be about to finish. When it does, you’ll usually roll straight onto your supplier’s expensive default tariff.
Fixed energy tariffs mean that the unit prices for your gas and electricity won’t change for a set period of time, providing peace of mind that you won’t be hit by any sudden price rises. However, unless you switch when your fixed tariff ends, you might end up paying much more than you currently are for your energy.
According to comparison site MoneySuperMarket.com, 110 fixed energy tariffs are coming to an end over April and May. A spokesman for MoneySuperMarket said: “Many of the 110 fixed rate deals ending in April and May include exit fees, but customers are often unaware that they are allowed to switch suppliers within six weeks of their tariff end date without being charged a penalty fee – meaning those with a fixed rate tariff ending in April and May can start shopping around for a competitive tariff now.”
Which is the best energy tariff for me?
The best tariff for you will depend on where you live and on how much energy you use. The best way to compare gas and electricity prices and find the cheapest possible deal for you is to use comparison sites such as Uswitch, energyhelpline.com or MoneySuperMarket.com.
These are all Ofgem-accredited price comparison sites, which means they comply with the energy regulator’s Code of Practice and the prices and options displayed have been calculated fairly in an unbiased way. It’s a good idea to search on a few different sites, as some may have negotiated exclusive deals which may not be available elsewhere, and some comparison sites may not include every supplier. There are only a few questions needed to provide an energy quote so checking on several sites can quickly give you peace of mind that you’ve explored as many options as possible.
What information do I need to switch energy supplier?
You’ll need details of your existing tariff, as well as an idea of how much you usually pay for your energy in order to get an accurate quote of how much you can save. You should be able to find all the information you’ll need on your latest energy bill. You’ll also need your bank details so you can complete the Direct Debit form if you plan to pay that way.
Make sure you check whether your current deal has an exit fee or not. If it does, you may want to wait until the fee is no longer payable and you can move free of charge. Even if there is an exit fee, you might still find that the savings you could make by switching make moving worthwhile.
If you can’t find a recent bill, or aren’t sure who your energy suppliers are, you can use the following websites to find out who your suppliers are for:
Electricity – Energy Network Association
Energy Switching FAQ’s
What happens when I switch energy providers?
Once you’ve found a tariff you like, get in touch with the supplier you want to move to. If you’re switching via a comparison site, you can usually do this online by clicking on the tariff you’ve chosen. Your new supplier will set up the switch and notify your old supplier.
Remember that switching doesn’t involve any new pipes or meters – all you need to do is take a meter reading on the day your transfer takes place and give it to your new supplier. You’ll then receive a final bill from your old supplier, or you might receive a refund if your account was in credit. Any refund must be paid within 10 working days of them sending you your final bill. If it arrives later than this, your old supplier must pay you an additional £30 in compensation.
How long will it take to switch gas or electric provider?
Most energy suppliers have signed up to the Energy Switch Guarantee, a voluntary industry initiative set up by Energy UK, the trade association for the energy industry, which aims to make switching faster and “hassle-free.” If the supplier you’re moving to has signed up to the initiative, your switch should be completed within 21 days of you requesting it. If you’re switching to a supplier that doesn’t belong to the Energy Switch Guarantee, your switch should still take around three weeks, although some suppliers may take longer than this. Find out more about how the Energy Switch Guarantee works here.
If you change your mind about switching, you have 14 days to cancel from the date you agreed your new contract. If you do cancel, you will remain with your current supplier.
What happens if something goes wrong with my energy switch?
If your switch is taking longer than you were told, or if there’s any other kind of problem, complain to your energy company first.
If something does go wrong, you might be entitled to compensation. New requirements from Ofgem due to be introduced on May 1, mean that customers will receive an automatic £30 payment from suppliers if they are switched by mistake, if their switch takes longer than 15 working days, or if their final bill (from the supplier they are leaving) doesn’t arrive within six weeks. Find out more about customer compensation if something goes wrong here.
If your provider fails to sort out your issue within eight weeks of you making a complaint, you can contact the Energy Ombudsman to help you resolve things. If the Ombudsman finds in your favour, the company must take steps to put things right. You can get hold of the Energy Ombudsman here, or by telephone on 0330 440 1624. Even before the eight weeks are up, as the costs of arbitration by the Ombudsman are borne by the energy company, sometimes the mere threat of going to them will prompt the company to escalate your complaint.
Are there any other ways to reduce my energy bills?
Switching energy suppliers isn’t the only way to reduce your gas and electricity costs. Looking at ways you can be more energy efficient around your home can also reap financial rewards. Audrey Gallacher, interim chief executive at Energy UK, said: “While switching can be a way to save money, the best way to save money in the longer term is through energy efficiency. So, while we are managing the challenges thrown at us from the current lockdown, I’d encourage people to consider whether they could be saving money by being more energy efficient and help the environment at the same time.”
Quick tips such as using low energy light bulbs, turning electrical devices off (rather than on standby) and using less water in the kettle each time can all add up to big savings. You can find out other ways to be more energy efficient in our article Save money on your energy bills.
What happens if my energy supplier goes bust?
If your energy supplier goes bust, any credit balance you have with them is protected and guaranteed by the energy regulator, which will then assign a new energy supplier.Your energy supply won’t be disrupted and won’t notice any change, other than being notified about your new supplier.
Can I switch energy providers if I’m on a prepayment meter?
Don’t assume you won’t be able to switch energy suppliers if you have a prepayment meter.With this type of meter, you pay up front for your energy before you actually use it. This is usually done by adding money to a ‘key’ or smart card, which you then insert into the meter.
If you have a standard credit meter, you are usually billed monthly or quarterly based on meter readings which are shown on your meter either in dial or digital form. Your energy supplier will usually send a meter reader to your home once or twice a year to check your meter readings are up to date and accurate.
You can still switch suppliers if you have a prepayment meter, as long as you don’t have more than £500 of debt owing on the meter. However, the best energy deals are usually only available to people with credit meters, so it might be worth asking your existing supplier if you can switch over to one.
Have you switched energy suppliers recently, or are you looking at other ways to reduce your energy bills? You can get in touch via [email protected] or leave a comment below…