How to find a cheap energy supplier

Last updated: 9 September 2020

In this guide, you’ll find answers to the following questions:

  • Why should I switch suppliers?

  • Why are my energy bills so high?

  • What steps should I follow to find a cheap energy supplier?

  • How do I switch to a new energy supplier?

  • How can tenants find cheap energy deals?

Why should I switch suppliers?

The simple reason is price: if you’re on the hunt for cheap gas and electricity, then you need to compare suppliers to find which are the cheapest energy providers. There’s no single cheap electric and gas supplier offering the lowest prices across the board. Energy costs vary for several reasons, ranging from where you live to the size of your household and your meter type.

In the same way that energy prices constantly fluctuate, the cheapest gas and electric deals will change accordingly. If you’ve come to the end of a fixed term contract, have just moved to a new house, or simply feel that you’re paying too much for your current energy use, then it’s time to switch suppliers. It’s easy to run a quick comparison to see what deals are out there, giving you access to cheap energy providers in your area. 

Why are my energy bills so high?

Naturally, this is influenced by how much energy you use, but if your bills have suddenly risen without any obvious increase in your consumption, there are a few potential reasons: 

Your supplier has raised prices

If you’re on a standard variable tariff, your energy supplier can raise prices at any time. They typically do this as a reaction to a rise in the wholesale cost of electricity and/or gas. 

End of a fixed price plan

If you’ve been on a fixed term tariff then this may signal that it’s now ended. Often, suppliers automatically switch their customers over to their standard variable or default tariff, which is typically much more expensive. 

Estimated meter readings

Do you regularly submit your own meter readings to the supplier? If not, you’ll be paying based on estimated use. This could be higher than what you’re using, so it’s always worth submitting regular readings. 

What steps should I follow to find a cheap energy supplier?

Once you’ve made the decision to switch suppliers to find the cheapest gas and electricity, there are a few simple steps to take. 

Step 1: Consider where you live

One of the first factors that determine the cost of your electricity and gas is your postcode. Remote, rural parts of the country typically involve higher costs, while South East England enjoys the best-value gas and electricity. 

Step 2: Use an energy comparison website 

The best way to find a cheap energy supplier is by searching for current plans using a trusted energy comparison website. You can compare gas and electricity prices separately or view dual fuel prices. Just input your postcode, address details, and figures from your latest energy bill. If you don’t have a bill close to hand, the comparison website will walk you through a few basic lifestyle questions to estimate your household’s usage. 

Step 3: Compare the big six suppliers

When you’ve entered your details, you can compare prices from the country’s big six energy suppliers: Centrica plc (British Gas, Scottish Gas and Nwy Prydain), OVO (including Scottish and Southern Energy – SSE), npower, E.ON, EDF, and ScottishPower. 

ese suppliers won’t necessarily have the cheapest offers, but they will tend to feature the widest range of tariffs and prices to choose from. Because they’re well established, they also run little risk of going bankrupt like some smaller suppliers. Be sure to look beyond the headline figures of each tariff, though: what payment methods do they accept? Are there expensive exit fees? 

Step 4: Consider smaller energy suppliers 

Small energy suppliers can often provide more competitive rates than the big six because they need to attract new customers. They’re starting to dominate comparison tables with cheap prices and a host of other features. Many of these smaller companies, like Bulb or OVO Energy, have been in the market long enough to consider themselves established, and this segment is a rapidly growing proportion of the industry. If a new company goes under, your supply won’t be interrupted. Industry regulator Ofgem ensures that energy customers are simply moved to a different supplier should this happen. 

Step 5: Compare fixed and variable rates

In addition to the size and reputation of the supplier, another factor to consider during your search is the type of contract. When you run your comparison, you’ll see both fixed and variable plans listed. Fixed-rate contracts tend to last between 12-24 months, guaranteeing to charge a fixed rate for each unit (kWh) of energy you consume during the length of the tariff. Bills will still vary according to your monthly usage, but you know there won’t be any unexpected rate rises to worry about. 

Variable price tariffs will go up or down depending on the price of wholesale energy. This is important to bear in mind: today’s variable tariff might offer the cheapest electricity deal, but if wholesale prices rise next month, that may no longer be the case. Generally, standard variable rate tariffs should be avoided. These are the default contracts that providers automatically move customers to at the end of a fixed deal, and are usually much higher in price. 

Step 6: Look at different types of metered plans

Do you have a special meter installed at home? This will impact your cheap energy options.

Economy 7Smart meterPrepayment meter
You’ll see two sets of numbers on the meter. Economy 7 tariffs employ a dual-pricing plan. You’ll pay ‘normal’ energy prices during the day, but quality for cheaper rates overnight – ideal for washing laundry, running the dishwasher, or charging your electric vehicle.Occasionally, suppliers may offer cheaper rates for customers with smart meters. These tend to produce cheaper bills anyway, as readings are sent automatically to your supplier at regular intervals to avoid inaccurate estimated bills.These Pay-As-You-Go plans require you to ‘top up’ your account with credit before consuming energy. Although they allow you to track the cost of your energy and avoid falling into arrears, prices tend to be less competitive. PAYG tariffs are available from all the big six but check with smaller suppliers too.

How do I switch to a new cheap energy supplier?

After you’ve followed these steps and weighed your options carefully, you can simply select the cheapest gas and electric plan from the price comparison website. The process of switching is free of charge. Fill out the requested information online and your new energy supplier will do the heavy lifting of contacting your old supplier to arrange the changeover. You should also receive a welcome pack including all relevant details of your new plan – read this carefully, as there’s a 14-day cooling-off period in which you can cancel without penalty if you change your mind or spot something not right. 

If you don’t have a smart meter, be sure to take a meter reading on the day before you switch. Compare this with the final bill sent by your old supplier – in some cases they may even owe you money, which is quite common if you pay your bill by monthly direct debit and switch in late summer, when monthly bills are low and you’re building a pot for the winter months ahead.

How can tenants find cheap energy deals?

If you’re renting a property, you could still switch suppliers to find the best value gas and electricity prices for tenants. Check your tenancy agreement first to see who is responsible for paying bills. If they’re in your landlord’s name, you will need to consult them first. When the bills are listed in your name, you have the right to switch to the cheapest energy supplier whenever you wish.

What if the cheapest energy supplier is my current one?

While most people find a cheaper deal with a different supplier when comparing energy deals, it’s not unheard for your current plan to be the best. There’s no obligation to switch after you’ve run a comparison, but it’s something you should check on a semi-regular basis as the market does change. You may find that your current provider offers the best deal, but that you’re not on their cheapest plan. You can contact them directly to switch plans using the tools on their website or get in touch via email or phone. 

How do I know a supplier is right for me?

The best energy plan won’t necessarily be the cheapest. In addition to looking at prices, you should also consider factors like customer service, supplier reputation, and freedom within the plan. An increasing number of consumers are looking for green energy plans, which tend to cost a bit more, although prices are becoming increasingly competitive as renewable energy sources grow. You can filter your results to find the plan that not only offers the cheapest gas and electric prices, but also ticks one or more of these boxes depending on your priorities. 

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Ben GallizziEnergy Expert - Nov 1st 2019