What would you think if we said you’re potentially wasting £315 annually on gas and electricity? A recent study has shown that UK households are wasting a whopping £3.5 BILLION every year by overpaying on their energy bills.
For most, paying hefty energy charges often comes down to a lack of awareness of what better deals are available or the apparent hassle of switching energy suppliers. It doesn’t have to be this way! Read on to learn how to find the best energy deal and save on your household energy bill.
With the proliferation of energy suppliers in the market, it can be overwhelming to compare the various tariffs and services that each offer. Choosing the right energy supplier is a not decision you should take lightly. As well as defining how much you'll pay each month, it will also influence how easy it is to manage your energy supply going forward. Overall, changing suppliers is straightforward. Still, if you can avoid going through the process at all by choosing the right supplier to begin with, it might be easier for you in the long run.
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Should You Go for A Big Six Energy Supplier or A New Energy Supplier?
The “Big Six” energy suppliers (British Gas, EDF Energy, E.ON, Npower, Scottish Power and SSE) are the most popular, with a combined market share of 70%. If you value reputation and reliability above all, you could opt for one of these suppliers; after all, their quality of service is what has put them in their position.
However, the Big Six have often come under fire for charging among the highest rates for gas and electricity in the industry. You are paying a premium for your service! Another criticism is that the Big Six also offer limited plans as compared to newer competitors, which restricts your choice.
Some smaller, newer suppliers, on the other hand, have been significantly increasing in popularity given their economical rates for energy supply, for offering a wide range of tariffs, delivering a user-friendly digital presence, and responsive customer service.
When deciding upon an energy supplier, it’s best to compare tariffs from a wide range of suppliers to ensure you are getting the best deal. Since suppliers’ energy rates differ by location, you could shortlist your preferred suppliers based on their services, reputation, customer service and other factors first. You could then compare the best energy tariffs from these suppliers in your area.
Should You Get Gas and Electricity from The Same Supplier?
Many companies offer dual fuel tariffs, meaning you receive your energy supply from the same provider as opposed to two different suppliers for gas and electricity. Dual fuel tariffs not only potentially reduce the overall amount you pay but also give you the added convenience of dealing with only one supplier.
Some of the other reasons you might consider a dual fuel tariff are:
- Your overall energy rates may be cheaper, and your energy suppliers might offer you a special discount for choosing a dual fuel tariff.
- It’s easier and more convenient to pay a single bill instead of two separate ones.
- You only need to submit meter readings to one company.
- Switching energy suppliers is much easier if you only have to deal with one supplier.
- You only need to install a single smart meter at your home for both gas and electricity.
How to Search for And Compare Energy Suppliers
Who has time to call 15 energy suppliers to find out the best deals? Fortunately, technology has made it easy to get a wide range of quotes and switch energy suppliers quickly and effortlessly. Additionally, several of the below mentioned providers let you receive a quotation for free, which makes it easier to decide upon the best way to switch.
Price Comparison Sites
Several well-known energy comparison websites will do the job for you. Try uSwitch, CompareTheMarket, or SimplySwitch, which are among the most widely used price comparison sites. All you need to do is enter your location, plus a few details regarding your residence and current energy usage. You will gain access to a comprehensive list of tariffs for your area, which should make your job of selection much more straightforward.
Energy Auto-Switching Services
Auto-switching takes the hassle of managing your relationship with your energy supplier out of your hands. These services do the work for you by:
- Sourcing the best energy deals in your area.
- Switching you over to your selected tariff (only after notifying you).
- Ending your contract with your previous supplier.
- Managing your ongoing bill payments.
What's excellent about auto-switching services is that even after switching, they continue to browse tariffs in case a better deal comes up, always keeping you ahead of the curve. Just make sure that your auto-switching service doesn’t restrict its recommendations for new tariffs to the ones provided by its paid partners and sponsors. Otherwise, you may not be getting as much of a bang for your buck as you might think. Try Flipper or SwitchD – these are two of the most popular auto-switching platforms out there.
Next: Let’s Talk About Tariffs
Now that you’ve chosen an energy supplier, it’s time to select a suitable tariff.
As mentioned earlier, these can change based on your location. Depending on where you live, the price of the same tariff can be extremely different. The East Midlands, for example, is known to have the lowest average unit rate for electricity, as compared to North Scotland, which has the highest.
Some of the most widely offered types of tariffs are:
Standard Energy Tariff / Standard Variable Tariff
This is your energy supplier’s default tariff, which is evergreen, meaning it does not have a fixed end date. The most significant advantage of these tariffs is, in most cases, you will not have to pay an exit fee to switch suppliers. However, these are typically the most expensive tariffs since the price of energy is variable and fluctuates in line with wholesale energy prices.
Fixed Energy Tariff
Under a fixed energy tariff, your per-unit rate of energy is fixed, meaning your bills depend entirely on your energy consumption and nothing else. While they can work out more economically in the long run, these types of contracts usually require renewal after a certain amount of time. Additionally, you typically need to pay an exit fee for switching from this type of tariff.
Prepayment Energy Tariff
Prepayment plans allow you to “top up” your energy meter and pay for gas and electricity in advance, similar to a prepaid mobile plan. While this can be handy for budgeting and keeping your bills in check, running out of credit might cause disruptions to your energy supply. Additionally, a common criticism is that prepayment energy tariffs are among the priciest options available. However, as of April 2017, the government has placed a cap on these types of tariffs.
Green Energy Tariff
The push for climate awareness has increased the popularity of green tariffs, which are an eco-friendly and economical alternative to the standard variable tariff. If you choose this type of tariff, your provider usually guarantees to match your energy usage with an equal amount of energy generated from renewable energy sources.
Which Are Better, Fixed or Variable Tariffs?
Choosing between a fixed and variable tariff boils down to two things:
- How willing you are to risk paying higher energy rates in certain months and lower energy rates in other months.
- Whether you have the time and inclination to monitor the best energy deals in your location.
Since variable tariffs fluctuate in line with wholesale energy market prices, it’s down to you to know when your per-unit rate for energy might increase or decrease. The benefit is that you usually have much more flexibility to switch from variable rate tariffs if you are unhappy with how much you are paying for energy.
On the other hand, fixed-rate tariffs guarantee the per-unit rate you pay for energy consumption. It is, therefore, easier to plan and control the amount you'll spend each month on energy. However, you will need to change or renew your contract at the end of its term to avoid being switched to a variable tariff. You will also usually have to pay exit fees for ending a fixed tariff contract early.
Smart Meters: Should You Get One?
The UK government has committed to installing a smart meter in every home by 2024, which means that the shift to smart meters is inevitable. So why not get comfortable with one right away?
What Is A Smart Meter?
A smart meter is a modern upgrade of a traditional energy meter, which automatically records energy usage at 30-minute intervals. The most significant advantage of this is that you will never need to send another meter reading to your supplier. Your energy usage data is sent directly to your supplier so they can bill you accurately, based on up-to-date meter readings.
Sometimes, with smaller energy suppliers, you may be asked to submit an occasional meter reading even if you have a smart meter installed. This could be because:
- You’re a new customer, in which case a first reading is required to connect remotely to your smart meter.
- Your smart meter is an older generation meter (also known as a SMETS 1), which does not link automatically to your new energy supplier. Only more modern smart meters (known as SMETS 2) can take automatic meter readings.
- Your meter is faulty or is not automatically reporting energy usage data to your supplier. In this case, you may need to replace your smart meter.
How Much Does It Cost to Get A Smart Meter?
Most suppliers don’t charge any fees for installing a smart meter. However, the cost of the meter is subsidised in your energy bills over the next few months following installation. You might notice minute “Smart Meter charges” on your energy bill.
Can You Save Money with A Smart Meter?
A smart meter does not directly reduce the price that you pay for energy in any way. However, it does help you become more aware of your energy consumption via an interactive in-home display (IHD), which displays your daily energy usage. Seeing this is likely to encourage you to be more responsible with your energy consumption, which will help you save in the long term. A smart meter can also help to identify faulty appliances in your home, which you can upgrade or replace to be more energy efficient.
Finally: Switching Energy Suppliers
Contrary to what you might believe, switching energy suppliers is a painless process! It should take no longer than 21 days to switch, including a two-week "cooling off period" during which you have the right to change your mind about switching suppliers.
Many suppliers have also tried to ease up the process of switching by offering an “Energy Switch Guarantee”. This is a promise from the supplier to ensure seamless and hassle-free service, as well as to take care of any unexpected charges during the process of switching energy suppliers. Make sure to check if your supplier provides the Energy Switch Guarantee, as it can save time and money in the future if you consider switching.
Another concern many people have about switching suppliers is paying exit fees.
Can You Avoid Paying Exit Fees?
You usually have to pay an exit fee if you are prematurely terminating a fixed-term contract. Variable tariffs typically charge no exit fee for switching suppliers (though it is best to recheck this with your supplier before switching).
Some exceptional circumstances under which you may not need to pay any exit fees are:
- When your current fixed-term contract is coming to an end, and your energy supplier contacts you to renew or cancel it. During this “notice” period, you are free to switch suppliers without paying any exit fees, so time your switch well!
- If you are switching to a new tariff with your current supplier, or moving home and retaining your current supplier, most suppliers don’t charge exit fees for “internal” changes.
- If the new supplier you plan on switching to offers to cover the cost of your exit fees (sometimes offered as an incentive for switching).
As you can see, with the right knowledge, finding the right energy deal doesn’t have to be an ordeal. It’s as simple as switching on a light bulb!