Beatrice Lang
With the ever-changing landscape of energy prices, it is worth shopping around for electricity to find the best deal. Comparing prices and suppliers is a good way to save money, and with many fixed-rate energy deals offering rates lower than the energy price cap, there are potential savings to be made. However, it is important to be aware of exit fees and the fine print when switching suppliers or tariffs. Price comparison websites and services can help you find the best deal for your circumstances, and switching is now easier than ever with a guaranteed hassle-free switch within 21 days.
| Characteristics | Values |
|---|---|
| Fixed-rate energy deals | Each unit of gas or electricity costs less than the rate set by the energy price cap |
| Energy price cap | Changes every three months |
| Price-capped variable tariff | Prepayment meter customers pay slightly less than direct debit customers |
| Price comparison | Both fixed and variable tariffs will quote an annual cost based on the details entered about your home and energy usage |
| Exit fee | Charged when switching tariffs or suppliers before a fixed-rate tariff ends |
| Payment method | Paying by monthly direct debit is usually the cheapest way to pay for energy |
| Loyalty deals | Some providers offer better deals for existing customers |
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Fixed-rate tariffs
When considering a fixed-rate tariff, it is important to remember that if energy prices drop, you will not benefit from the reduced rates as you are locked into the fixed price. Additionally, some fixed-rate tariffs may have exit fees, so switching to a different tariff or supplier before the end of your contract could incur additional costs. It is worth noting that some suppliers may waive exit fees if you switch tariffs but remain with the same provider.
There are several factors to consider when choosing a fixed-rate tariff. Firstly, you can choose between single fuel and dual fuel tariffs. Single fuel means purchasing electricity and gas from different suppliers, while dual fuel involves getting both from the same supplier, which can sometimes result in a cheaper deal. Secondly, you can opt for online account management or paper billing, with the latter sometimes incurring an extra fee. Finally, you can select between green tariffs, which focus on renewable energy sources, and normal tariffs, which may or may not include renewables.
When deciding whether to switch to a fixed-rate tariff, it is essential to compare rates and consider any exit fees. Speaking to your current supplier is also advisable, as they may offer better deals for existing customers. Additionally, be mindful of your energy usage patterns, especially if you use more energy during peak periods or in the winter months, as this can impact the overall cost of your bill.
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Price caps
The energy price cap is a limit on the unit rates and standing charges that energy suppliers can charge for their "default" or standard variable tariffs. The rate is set by Ofgem, the energy regulator, and is reviewed four times a year. The price cap was introduced by the government in 2019. It caps the price you pay per unit for your energy, as well as the standing charge, whilst on a standard variable tariff. The price cap level is set for customers in England, Wales, and Scotland. Retail energy prices in Northern Ireland are not subject to a cap.
The price cap changes every three months, compared to a fixed-rate deal that lasts a year or longer, and prices can fall as well as rise if you’re on a variable tariff. The price cap limits the maximum amount energy suppliers can charge customers per unit of energy. The energy price cap covers around 21 million households in England, Wales, and Scotland and is set every three months by Ofgem. It fixes the maximum price that can be charged for each unit of energy on a standard or default variable tariff for a typical dual-fuel household that pays by direct debit.
The energy price cap is designed to protect customers from unprecedented energy bills. It is a "safety" price cap that subsidises the government. For example, during the 2022-23 winter, the government provided financial support to energy customers in the form of the Energy Bills Support Scheme, which gave each household a £400 discount on energy bills.
There are some fixed-rate energy deals where each unit of gas or electricity costs less than the rate set by the energy price cap. Before switching to a new supplier, it is worth speaking to your current supplier as it may offer superior loyalty deals to existing customers.
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Switching suppliers
Switching energy suppliers is a straightforward process thanks to the Energy Switch Guarantee, which covers over 90% of suppliers. It is handled entirely by the company you are moving to, and you are guaranteed a hassle-free switch within 21 days. You can stay on your old tariff until the process is complete, and you won't be without gas or electricity at any point.
To start the switching process, you should run a price comparison to find the best provider for you. You can use a free, independent energy comparison service to compare gas and electricity prices. You will need to provide some information, including your postcode, the name of your current supplier or contract, the name of your current tariff, and the amount of energy you use each year.
Once you have chosen a new supplier and tariff, you will need to give them the information listed above, and they will handle the switch for you. It should take up to five working days to switch your energy supplier, and you can also ask to be switched over on a later date.
It is worth noting that you may have to pay an exit fee if you switch tariffs or suppliers before your fixed-rate tariff ends. However, if you switch tariffs but stay with the same provider, some may waive the exit fee, so it is worth asking.
Additionally, be aware that the prices quoted in a price comparison will be based on your estimated annual energy usage, so your actual bills may vary depending on your monthly energy consumption.
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Loyalty deals
Some electricity providers also offer loyalty rewards for referring friends and family. For instance, Direct Energy provides rewards for consumers who refer friends or family, and Sainsbury'sTracker and Reward 12mi offer 750 Nectar points (worth £3.75) per fuel every three months, with two extra points for each pound spent in Sainsbury's stores/online.
It is important to remember that while these loyalty deals can provide great benefits, you should always compare the overall cost of the electricity plan and consider any exit fees that may apply. Additionally, be sure to read the fine print to fully understand the terms and conditions of the deal.
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Exit fees
If you are on a standard variable tariff, you will not be charged exit fees for switching to a new supplier. A standard variable tariff is the default rate that your supplier places you on once you finish your contract. While these tariffs are generally much more expensive than fixed-rate tariffs, they offer more flexibility to switch suppliers without incurring early exit fees.
There are a few ways to avoid paying exit fees. Firstly, you can switch to a new energy supplier within 49 days of your current deal expiring, and you won't be charged any exit fees. Secondly, if you switch tariffs but stay with the same provider, some may waive the exit fee, so it's worth asking. Finally, some smaller, lesser-known companies offer fixed-rate deals with no exit fees to remain competitive in the market. These companies often provide great value rates to encourage you to stay, so keep an eye out for these offers when comparing energy plans.
Before switching energy suppliers, it is essential to check with your current supplier to see if you are liable for any exit fees. By comparing energy prices and deals, you can find the best provider for your needs and potentially save money on your electricity bill.
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Frequently asked questions
Yes, it is worth shopping around and comparing rates. There are some fixed-rate energy deals where each unit of electricity costs less than the rate set by the energy price cap.
The energy price cap is the maximum rate that suppliers can charge for each unit of electricity. The cap changes every three months and the prices can fall as well as rise.
A fixed-rate tariff means that if energy prices go up, you will still pay the same price for each unit of energy you use. However, if energy prices go down, the price you pay will remain the same.
The process of switching energy suppliers is straightforward. You can use a price comparison website to compare tariffs from different suppliers and select the one that is right for you. The switching process is then handled entirely by the company you are moving to and it should take no longer than five working days.
