Switching Energy Suppliers

Will I save money if I switch energy supplier?

By Anita Shargall Thursday 14 December 2017
 

Switching your energy provider could help you find the cheapest energy prices and bring down the cost of your household bills.

Couple reading energy bills

Big 6 brands, big price savings – up to £250* off your bill

Around 66% of households are on standard variable rate (SVR) tariffs, according to energy market regulator Ofgem. These tariffs are typically more expensive: the average bill for a Big Six supplier is around £1140 a year, which has risen by up to 14% – but fixed term deals can start from as low as £830 a year.  

66% of UK households are on an expensive standard variable rate tariff

A quick  energy comparison of gas and electricity prices and suppliers will show you the scale of savings that you could be missing out on by not switching.  But with 54 energy suppliers to choose from, finding the right option can be a daunting task. Running a quote will give you up-to-date, accurate information that will help you make an informed decision about switching energy providers.

How much could I save if I switch energy supplier?

You could save an average of £250* a year if you switch energy supplier, but this varies according to a number of factors. For example, if you were to switch from a variable rate tariff with a Big Six provider to a small provider’s fixed rate tariff, then you could save considerably.

Are there any hidden charges or exit fees when switching?

There are no exit fees if you’re on a variable rate tariff. You may need to pay an exit fee if you’re on a fixed tariff and want to switch before your contract ends. These fees can vary from £10 to £40 per fuel.

However, if you’re coming to the end of a fixed-term contract, you won’t need to pay an exit fee. Energy firms must give around six to seven weeks’ notice of the end of your contract, offering you plenty of time to switch. You can find the information on your latest bill or on your energy supplier’s website. Make sure you check the details of your tariff before you switch to avoid any surprises.

Customers could save an average £250 a year by switching their energy supplier

What is the cheapest energy tariff on the market?

Fixed rate deals tend to be the cheapest, with prepayment meter customers footing the highest bills. As of October 2017, the difference between the cheapest energy tariff and the most expensive is around £375 when comparing a fixed rate deal with a variable rate of a green energy provider (according to MoneySuperMarket data). However, new energy tariffs come onto the market all the time so this will vary month by month.

You might find the cheapest deal for you is one of the exclusive tariffs negotiated by MoneySuperMarket. Make sure you sign up to our Energy Bill Buster emails to receive details of these deals.

Energy price fluctuation over the years

What types of energy tariff can I switch to?

The number of new energy providers on the market has increased significantly, with some now offering niche products that cater for a range of requirements. For example, tariffs can now be chosen by payment structure – fixed and variable rate – and by type. You can now get single fuel (gas or electricity), dual fuel (both), prepayment, Economy 7 and green energy.

Remember, renters have the right to switch their energy tariff as long as they pay the supplier directly. You might still be able to switch if you pay your landlord for energy, but you would normally have to seek their agreement.

Percentage of households on each type of tariff

What is a dual fuel discount?

Suppliers offer so-called 'dual fuel' discounts to encourage customers to sign up for both gas and electricity. This kind of discount makes the price lower than the cost of buying gas and electricity separately from that provider.

However, it’s important to compare dual fuel deals against the price of getting electricity from one provider and gas from another. You might find that ‘single’ tariff deals are cheaper, but you’ll have two different suppliers, bills and points of contact to deal with.

How do I switch energy providers?

Switching your energy provider is quick and hassle-free: all you need is a recent bill so you can compare prices, and you can switch in minutes. And don’t worry, your energy supply won't be cut off whilst you transition to a different supplier.

How many households in the UK use energy?

Here's how the switching process works:

1. Find a recent energy bill or use our estimation tool

You need to know who your supplier is, which tariff you’re on and what your average consumption is, as well as your postcode. This can all be found on your latest bill.

If you don’t have a bill to hand, our estimation tool will come up with an accurate estimate based on your home, looking at details such as the type of property, the number of rooms and the size of your family. You can also use the estimation tool if you have only recently moved into the property, unless you can get the correct details form the previous occupants.

2. Run a quote & select a tariff

When your details have been inputted into our comparison tool, you’ll be directed to a results page displaying all the tariffs that best suit your energy consumption needs.

Once you’ve selected the tariff to switch to, you’ll be directed to a confirmation page. This will ask for direct debit details and your meter readings, which helps your new supplier to create a new bill and allows your old supplier to send a final bill.

3. Check your old account balance

If you are in credit when you switch, the money should be refunded to your account automatically, but it’s worth checking for the payment and chasing it up if necessary. Similarly, keep an eye out for any final payments that may be in arrears from your old provider.

4. Allow for around three weeks for the switch to complete  

Switching is a simple procedure that doesn’t need any rewiring or work outside your property. In fact, you shouldn’t notice any difference apart from lower bills.

It typically takes up to 21 days for a full switch, which includes the obligatory two-week ‘cooling off’ period, when you can choose to cancel the switch free of charge.

How to switch from a prepayment meter

It’s possible to switch from a prepayment meter to a credit meter. Some suppliers may charge you for the set up so it's worth checking the small print to see if you could end up paying an upfront cost. If you are unable to switch from your prepayment meter, you may be able to switch to a better priced prepayment tariff. A quick price comparison will show you the suppliers that could save you money. 

Barriers to switching

Ofgem survey of the Unplugged & On-Standby Segments. Correct as of 2016.

 

Despite the serious potential savings, more than half (56%) of consumers are put off from switching because they think it’s just too much hassle, according to Ofgem.

Why aren’t consumers switching energy provider?

Ofgem found that there are five main fears that prevent consumers from switching:

  • Their cost of energy will go up
  • They might not save much money
  • They might be charged twice or get a shock bill
  • Their energy might get cut-off
  • Their new supplier could go bust

Comparing the energy market should ease these fears: you’ll find out if your bills could be reduced and see just how much money you could actually save. When you use an energy comparison tool, you’ll see details of the best offers available and be able to select the best supplier and tariff for you.

Don’t forget that if you are ever charged twice, you can request a refund – and if you pay by Direct Debit, the money will be put straight back into your account.

And whilst you may consider going with a smaller supplier a risk, in case they go bust, it’s important to know that you will never be cut-off or without energy. Read more about energy providers and what happens if they go bust.

 

*Based on average savings for customers that applied to switch via MoneySuperMarket, Jan-Aug 17

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