Energy prices are always moving, which means you have to keep a close eye on the latest deals to make sure you’re not paying over the odds for your electricity. Though anyone who hasn’t switched in the last couple of years almost certainly will be.
We’re continuing to see the rise of smaller, challenger energy suppliers like OVO, First Utility and Extra Energy. They’re putting pressure on the ‘Big Six’ suppliers (British Gas, EDF Energy, E.on, Scottish Power, nPower and SSE) and changing the market.
Meanwhile, wholesale energy prices are going up and suppliers are passing on the additional costs to their loyal customers.
It all makes now as good a time as ever to compare electricity prices and switch to the best available deal.
Our energy comparison service is really easy to use and can save you money. On average, customers who applied to switch via MoneySuperMarket between January and August 2017 could save £250 on their bills.
Why are prices rising?
Electricity suppliers buy energy on the wholesale market and then sell it on to households at a profit. If wholesale costs rise then it eats into suppliers’ profit margins, unless they increase prices — which means households foot the bill.
In 2016 wholesale prices started to tick upwards. We also had the ‘Brexit’ vote to leave the European Union which may have indirectly affected prices as the changing value of the pound affected our buying power for imported energy.
What does switching involve?
Comparing electricity prices and switching is a quick and easy process.
First you tell us a bit about yourself, then we show you how much you could save by switching to a range of different tariffs. Finally you choose one and apply through the supplier.
You can also ring our call centre on 0800 177 7087. Lines are open 9am – 8pm Monday to Thursday, 9am – 5.30pm on Fridays and 10am – 2pm on Saturdays.
To help you through, here’s a quick explanation of a few of the terms you’ll see:
Rarely the cheapest deal, a standard tariff will see the price you pay for your electricity (per unit) change as the supplier raises and lowers its prices.
This fixes the price you pay per unit for your electricity for as long as you’re on the tariff, usually 1 or 2 years. If prices generally go up, it won’t affect the price you pay per unit.
Again, it’s the price per unit that’s fixed. You’ll still have bigger bills if you use more electricity.
Imagine a supermarket that promises to sells bags of potatoes for £1.50 for the next two years and another that says its prices could go up or down during that time.
With both supermarkets, the more potatoes you eat, the more you’ll pay over the two years, but the per-bag price will always be £1.50 with the first supermarket.
The trade-off with non-fixed deals is that prices could generally go down and end up cheaper than the level you fixed at, at which point you’ll want to switch tariffs. Depending on the fixed deal, this could mean paying a penalty to leave.
If the penalty is bigger than the saving you’d make by switching, it won’t be worth it.
Economy 7 customers get cheaper rates of electricity for seven hours of the day – usually a section of time between 10pm and 9am.
Day rates tend to be higher than they would on conventional tariffs, but Economy 7 could suit you if you can limit your daytime electricity use, perhaps by utilising storage heaters for your energy, or setting the washing machine to go at night.
Many suppliers offer dual fuel tariffs, offering you a discount to get both electricity and gas from them. It gives you the convenience of just one bill from one supplier, but it is sometimes possible to get a better deal when you buy gas and electricity separately from different suppliers.
Many suppliers will give you a discount for managing your account online rather than by paper billing.
Cash, cheque or direct debit
Direct debit payment tends to be the cheapest way to pay for your electricity, as suppliers will charge more for paying by cash or cheque.
As mentioned previously, some fixed deals come with cancellation fees if you leave within the term of the deal. You can expect to pay something like £30 per fuel type.
The government wants a smart meter in every home by 2020. Smart meters send automatic meter readings to your supplier for super-accurate billing (no more estimates). They can also help you monitor and reduce your energy usage.
Here are some other ways to save money on electricity bills:
- Switching off unused appliances at the wall, rather than putting them on standby.
- Wash clothes at 30 degrees instead of 40 degrees.
- Use energy-saving light bulbs and switch off lights in unoccupied rooms.
- Choose energy-efficient appliances.
- Use eco-settings on washing machines and dishwashers.
*Based on average savings for customers that applied to switch via MoneySuperMarket, Jan-Aug 17