Why compare gas and electric prices?
Paying a fair price for your gas and electricity supply should be as given in the UK but unfortunately it is not. The Big 6 energy companies in Britain have colluded to make sure you never know if you are paying too much.
I'll get into the details further on but to summarise as I know most of you just want to save money on your energy bills. So the reason you need to compare your gas and electricity suppliers prices with other companies is to find out where you can get the best deal.
Using an energy comparison site is the best way to compare and save if you don't want to spend ages researching energy suppliers. Using a comparison site will save you money, not as much as delving into the real nitty gritty like I do to research prices and companies for Safe Energy Switch.
But I bet you'd rather spend 5 minutes to save a few hundred pounds rather than 2 hours to save a bit more. Comparing is free and easy and there is no obligation, 5 minutes and you can see how much you can really reduce your bills by. So click here to compare now.
Why energy prices are so complicated
OK so you are interested in the nitty gritty, that's great so lets see why it is so difficult to find out how much you should be paying for gas and electricity.
The UK is divided and run by 16 different distribution network operators which are in turn owned by 6 major operators. Each of these operators set the base regional pricing for each region of the UK. The price is based on how much it costs to get the energy to you at your location which is why you need to puppy your postcode if you want to compare and switch suppliers.
Some regions are more expensive than others, East Midlands is one of the cheapest energy regions and North Scotland one of the most expensive. So if there were two identical households using the same amount of energy annually but were located in different parts of the UK one would still pay more than the other even if they were both on the same tariff from the same energy company.
So one of the questions I get asked a lot is what is the average energy bill for a typical household? The answer is it is completely irrelevant as it won't reflect your energy usage patterns, how efficient your insulation or heating system is or where you live in the UK. What people really want to know is if they are paying too much for their energy.
If you are still intrigued then take a quick peek at what the average gas and electricity bill for a 3 bedroom house is.
Every energy company in Britain has a myriad of tariffs, some have thousands whilst others try to keep it simple and just have a few. An energy tariff tells you the price you pay for the gas and electricity you use measured in kWh and how much you are charged each day, the standing charge which covers the cost of supplying the energy to you.
Companies release new tariffs every day and they withdraw old tariffs from the market. You can only switch to a live tariff so good deals can disappear at any time. It is very complicated to calculate which tariff is the cheapest by yourself so the only way to check is to visit each of the energy providers websites and tap in your details to get a price based on how much you used over the last 2 months.
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Clearly that would be very time consuming so consumers only visit an energy providers website directly on a recommendation or with the offer of some sort of cashback. The Bulb energy referral scheme is a way that Bulb lures in unsuspecting customers. It's a great for a company to acquire new customers cheaply, I'll give you £50 to join us but then charge £100 more on your bill. You might sense I'm not a big fan, neither am I a fan of the Big 6 tactics of pushing up their prices know that there older more vulnerable customers will stay with them and pay the loyalty tax.
The only sensible way to find out the best deal for you is to use an energy comparison site to compare your location and energy usage to get the best deal. We have a list of energy comparison sites here.
Compare, switch and save
So to answer the question more fully, why compare energy prices? Everyone likes to save money and no-one likes to overpay for something, especially when it is so easy to switch and get it cheaper.
Staying with the same energy company will ensure you pay more for your gas and electric. Even if you are on a fixed deal when that runs out you will automatically be moved onto the energy suppliers standard variable tariff. This is always usually the most expensive tariff to be on. I've only ever found the Yorkshire Energy Variable tariff to be good value and at the time of writing it is the cheapest energy deal you can get.
Most of us in the UK are currently overpaying, if they weren't we'd all be on the same energy tariff with the same company. Even after you switch to a good deal and save yourself a few hundred quid that deal will be unlikely to be the cheapest a year on.
The trick to making sure you are always on the best deal without spending to much time is to spend 5 minutes once a year comparing energy prices and switching if there is a better deal on offer.