The energy supply market is constantly changing. From niche start-ups to the big six, this means you have access to a wider selection of energy plans and prices than ever. With so many options, what should you look for when you’re comparing tariffs? Although you can simply select the cheapest rate, here’s a look at the factors to be mindful of, as well as what’s involved in energy comparison.
There’s never a bad time to compare energy prices. It’s smart to be aware of your options, whether you’re coming to the end of a fixed-term plan or simply wish to save a few pounds. In most cases, you’ll save money by switching to a different plan because energy suppliers offer the most competitive rates to their new customers. Energy comparison sites display what’s on offer, whether you want to swap your prepayment meter for a standard meter or simply find the cheapest gas and electricity so you can switch energy supplier.
It couldn’t be easier to see a breakdown of the best deals in your area.
1. Gather your details
Energy comparison sites are the best way to view current rates from a variety of suppliers. To get started, you’ll need a few key details.
Your name, address and postcode
Your current energy supplier
The name of your rate or plan
Your gas and electricity usage
Your bank details (if you want to set up a direct debit or standing order)
If you have a recent energy bill, all this information is clearly displayed. Otherwise, contact your current supplier to ask them for the details you’re missing. A switch is possible with no more than your postcode – comparison tools can estimate your usage based on property size – but the more information you have, the better comparison you can make.
2. Enter your postcode and information
Enter your details into the comparison site’s search tool to pull up a list of current options. You’ll see a user-friendly breakdown of each plan, including discounts you might be eligible for based on your details. Entering your postcode ensures you’ll get targeted rates for your area, because fuel prices vary between region.
3. Compare gas and electric prices and plans
You’ll be presented with a full list of the best energy deals specifically for your requirements and budget to choose from after hitting the search button. This can be a bit intimidating, but it’s easy to filter your results by price, contract length, plan features or customer ratings.
4. Switch to the cheapest gas and electric tariff
You’ve compared all the different prices and made your choice. Now what? After you’ve submitted your details to the new supplier so you can switch energy, there will be a brief transition period. If you find a better deal during the next 14 days or simply change your mind, you can cancel without penalty. The full transition process takes up to 21 days. There won’t be any disruption to your services, nor will there be any need for the new supplier to come out and physically install cables or pipes.
Look for a welcome pack with all the details about your new plan and read it over carefully to be sure it’s the prices you’re expecting. You’ll also receive an end-of-contract bill from your old supplier – pay any outstanding balance and submit your final meter reading.
When you compare energy prices, you’ll see reference to both fixed and variable rates. Fixed tariffs are often more cost-effective, guaranteeing unit costs for a specified length of time. If you want to avoid any global market fluctuations and prices are currently low, this can be a great option. Most suppliers offer cheaper fixed rates in comparison to their standard prices, with the side benefit of stability.
As you get to the end of your fixed-rate plan, it’s time to start comparing energy prices again to be sure you’re on the cheapest tariff. Otherwise, you’ll be switched over automatically to the supplier’s standard rate, which won’t be such a good deal.
By contrast, variable energy prices will go up and down as the global cost of energy supply changes. This can certainly work out in your favour if you want to take a gamble on prices dropping, but it can also inflate your bills if the opposite should happen. During periods of high demand, rates could spike, and your bill will reflect these changes. You should adjust your budget to match these market fluctuations if you opt for a variable rate.
Time-of-use plans are another type of tariff to consider, charging different rates at different hours of the day. These are called Economy 7 plans or White Meter plans in Scotland. The ‘7’ in the plan refers to the number of hours charged at a lower rate, in this case, overnight. You’ll have a set period of off-peak hours with a cheaper per-unit price. The idea is that you can use energy-intensive appliances like washing machines and dishwashers during these overnight hours. With a lower rate, you’ll save money on your bills. They require installation of a special meter to keep track of the dual rates but can be an economic option if they suit your lifestyle.
Of course, there’s more to think about than price alone in an energy comparison. When you filter your results from the comparison website, you’ll note that the cheapest option might be from suppliers you’ve never heard of. Small suppliers tend to offer the most competitive rates to attract new customers and grow. But would you be able to trust a small supplier? Do they offer all the features in a plan that you’re looking for?
Customer service – It’s important to save money on energy, but you should also feel confident that you’ll be able to get in touch with the supplier should anything go wrong. Is the switchover process simple or complicated? Does the product offer good value for money? Would customers in your region recommend this supplier? Most comparison tables will offer customer service ratings, with information gathered from UK energy customers.
Smart meters – There’s a plan to roll out smart meters to all UK households by the end of 2024, but in the meantime, this is an elective feature that could be a beneficial component of any energy plan. Smart meters learn from your household habits to provide more efficient service. They come equipped with an in-home display that shows off your current data, so that you can gain control of your energy use and adjust accordingly. Most also feature a free smartphone app to keep tabs on energy use at a distance. At the moment, they’re available in many areas, but you’ll need to enter your postcode to find out if this type of plan is available to you.
Green energy plans – Reducing your home or business carbon footprint might be a high priority, in which case, you can look for rates that are both eco-friendly and economical. Green energy plans are becoming increasingly popular in the UK, offsetting your energy use by using renewable supply sources like wind and solar power. Although the rates for these types of plans are usually somewhat higher, you can compare green energy plans from different suppliers to find the best deals.
In a typical energy comparison chart, you’ll see the basic rates. However, don’t forget that your usage will vary from month to month – this means your annual price may be different from what’s listed. You should be able to see projected annual costs based on your past usage and lifestyle, but these won’t be 100% accurate. There are also a few fees that might drive up the price listed.
Service protection plans – These types of plans act as a supplement to your basic home insurance, covering the cost of appliance repair or HVAC maintenance.
Cancellation fees – Also called an exit or termination fee, the cancellation charge applies when you leave a fixed-term contract before the plan end date. These vary but can go up to £100 or more, so be sure to work it into your calculations if you like to switch suppliers frequently.
Installation fees – This applies if you’re switching from a prepayment plan to one with a standard meter. Although none of the big six suppliers will charge for this switch, some of the smaller ones might. You could also be charged a deposit if your credit rating is low or you’ve had past issues with utility debt.
It’s recommended that you run an energy comparison frequently just to see what’s out there. Consumers can switch suppliers at any time of year without impacting on service. Coming to the end of a fixed contract or moving to a new house are both particularly smart times to weigh your options, as otherwise you’ll be placed onto a standard tariff. It only takes a matter of minutes to find the cheapest gas and electric prices – time well spent!