How to Switch Energy and Save
Energy Deals are 16-18 percent cheaper than a year ago so chances are the tariff you are on that you switched to last year is more expensive than this year's equivalent. The lowest cost gas and electricity deals are starting to slowly creep up again so now is a good time to lock in a cheaper price for 12 months.
There are a lot of loyal energy customers in the UK who stick with the same energy supplier even though they are being overcharged. At Safe Energy Switch we have been investigating energy prices and energy suppliers.
We have found that energy companies can often be misleading, making out you are currently getting a good price from your energy provider so you don't think you need to switch. We've seen well known suppliers such as Bulb being ordered to pay back £1.76 million to customers after overcharging them and blocking them from switching to a cheaper deal.
Over the years many suppliers have given the impression that it is too complicated to switch to a cheaper deal. In reality as long as you have a few pieces of information from a recent energy bill or statement it's actually very easy to switch and save.
How to switch energy suppliers
Based on figures from gas and electric comparison sites the average saving for people who switch is between £248 and £479.
In order to get an accurate energy comparison you will need to know how much energy you use over the course of a year. If you cannot find this information on your bill the next most accurate way is to compare using the amount you pay your current supplier monthly or annually.
How much gas and electricity you use
So the easiest and most accurate way to compare your current energy supplier with other energy companies is to use your annual gas and electricity consumption measured in kWh's. Most energy bills show this information but it can sometimes be hard to find.
Your online bill or statement or paper bill should show you something similar to the image above. Not all energy suppliers make this information clear enough. If you can't find these figures on your bill then use your monthly cost assuming you generally pay the same amount each month.
If you have none of this information handy you can use an estimation, most comparison sites will have a feature where you can specify the number of bedrooms you have to get a rough estimate of how much energy you would typically use.
If you just want to see which supplier is the cheapest for the average kWh usage for a 3 bedroom house just enter the annual gas usage as 12,000 kWh and the annual electricity usage as 2,900 kWh (it used to be 3,100 kWh).
Your energy tariff
If you know the name of the tariff you are on you will get the most accurate comparison, if you don't your energy suppliers standard tariff will be assumed.
As you can see from the image above the cost in pence per kWh for your current tariff is displayed. At the end of the day the aim is to get the cheapest electricity per kWh and cheapest unit price for gas.
There is usually a daily standing charge but this only makes up a small portion of your bill, usually much less than a fifth of the total bill. However if you are a really low energy user or have a property that is left empty for long periods then it may be worth finding a tariff with the lowest standing charge for gas and electricity
Energy comparison site vs switching direct
In order to switch from one energy supplier to another you either need to use an energy comparison site or you can switch directly with your new supplier.
An energy provider comparison allows you to compare all of the energy companies side by side. It's the easier and most popular way to compare for a cheaper energy deal.
A secondary benefit of using a comparison site is that they handle the switch for you by taking care of providing your details to the new supplier.
Switching directly with your chosen energy supplier is another way to switch to a new energy provider. You may need to switch direct if the energy comparison website is unable to handle the switch on your behalf.
You should only switch direct with an energy provider if you have already compared the whole of the market first. The reason for this is that when you get a quote directly from a single supplier they will only compare energy prices with their own tariffs and not the whole of the market so you will only be able to see if that particular utility is cheaper.
Do not switch on just a recommendation from a friend or family member or because the energy company offers you cashback for switching. Firstly energy companies that offer cashback are never the cheapest and you end up paying more over the long run. Secondly, just because you are recommended to switch to an energy company it does not mean it will be a good deal for you.
Always do an energy comparison yourself which takes less than 5 minutes to confirm if you are getting a good deal on your gas and electricity.
Cashback for switching energy suppliers
Several energy suppliers offer cashback when you switch to them. Whilst this is not a problem if you were going to switch to that supplier anyway, it is a problem if you are switching to an energy company solely to get the cashback.
How do you think the energy companies can afford to offer cashback to companies? It's certainly not coming out of the executives pockets. Put simply they just make your gas and electricity bill more expensive to cover the cost of the cashback.
Take Bulb Energy, the Bulb refer a friend scheme gives you £50 cashback when you switch using a special referral code. However Bulb, by their own admission are not the cheapest energy supplier.
For the average UK household the annual gas and electricity bill as a Bulb customer would cost you about £918 a year. So if we reduced it further as they would credit your account with £50 it would be reduced to £868 for the first year.
If you did a comparison right now you could find at least a dozens of suppliers that would charge less than £868. Outfox the Market quoted £799, Green quoted £799 and Avro Energy quoted £818 to name a few so you could save a further £69 compared to Bulb even when you include the cashback.
How often should I switch?
For most of us reviewing and switching energy suppliers once a year is enough. If you haven't switched for a long time then you are more likely to save a greater amount.
If you are on a fixed rate energy tariff then your prices are not going to change over the course of your 1, 2 or 3 year fixed rate deal. However other tariffs on the market may become cheaper compared to yours, especially if you fix for a longer period.
Variable rate tariffs can go up and down in price so if you find your bills increasing it could be a good time to compare the energy market to see if you could be paying less.
Many energy suppliers release new fixed and variable rate tariffs. You could find that your current supplier has released a new tariff (to attract new customers) whilst you are on a more expensive tariff.
In order to ensure that you are not paying too much as a loyal customer you need to compare and switch once a year if you find a better deal elsewhere. It only takes 5 minutes to check. I can check prices in as little as 30 seconds now as I do it so often.
Automatic energy switching
Not everyone is prepared to or wants to have to remember to compare energy prices and choose a cheaper energy company to switch to. For those who would rather this be done for them automatically, companies such as Look After My BIlls (you may remember them from Dragons Den) provide a service where they compare for you and switch you if they find a cheaper deal.
You can try the automatic energy switching service and see if they can save you money. It enables households to continually ensure they are on the best energy deal.
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