How much can I save by switching energy suppliers?

Unless you are already on the cheapest dual-fuel, electricity or gas plan, paying by monthly direct debit and managing your energy account online, you can always save by comparing what energy suppliers offer.

Potential savings by switching energy suppliers - the basics

Official Department of Energy and Climate Change data suggest that customers pay the following average prices in the UK:

Fuel/Payment method

Credit (GBP/year)

Direct debit (GBP/year)

Prepayment (GBP/year)

Average (GBP/year)

Electricity (standard)

602

557

605

577

Electricity (E7)

809

745

810

776

Gas

767

701

758

729

Dual fuel (standard)

1369

1258

1363

1306

Dual fuel (E7)

1576

1446

1568

1505

According to these statistics:

  • switching from a prepaid energy plan to a direct debit energy plan can lead to savings of:

    • £48 for electricity (£65 with Economy7 for electricity);

    • £57 for gas;

    • £105 for dual fuel (£122 with Economy7 for electricity);

  • switching from a credit energy plan to a direct debit energy plan can lead to savings of:

    • £45 for electricity (£64 with Economy7 for electricity);

    • £66 for gas;

    • £111 for dual fuel (£130 with Economy7 for electricity).

However, customers on direct debit energy plans usually stand to lose out by switching payment methods, as DECC averages prices suggest.

What you can really save by switching energy suppliers

With average UK electricity and gas consumption (3,200 kWh per year for electricity and 13,500 kWh per year for gas), switching from the most expensive to the cheapest dual-fuel energy plan can save you over £300 per year and around £200 per year on average, when the average dual-fuel bill is around £1,150. This is considerable, and exponential if your electricity and/or gas usage is above average.

Saving by switching to an online energy plan

Online electricity and/or gas plans are often cheaper than paper energy plans because managing your account online saves your energy supplier considerable human resources: fewer phone calls means fewer people needed to answer the phone. Consequently, these savings are reflected in the prices customers pay.

An energy supplier comparison for June 2014 shows that customers moving from a paper billing energy plan to an online energy plan save over £100 per year and up to £250 per year if household electricity and gas usage is the same as the national average.

Saving by switching to a direct debit energy plan

Direct debit energy plans are often cheaper than payment on receipt of bill plans because your supplier is certain they will be paid on time, regularly, which makes managing sales accounts much simpler for them. Consequently, these savings are translated into lower costs for customers.

A comparison of energy suppliers in June 2014 shows that people moving from an energy plan with payment on receipt of bill to an electricity and gas plan on monthly direct debit stand to save over £50 per year and up to £200 per year if household electricity and gas usage is on par with national averages.

Saving by switching to a fixed-rate energy plan

One-year fixed-rate electricity and/or gas plans tend to be the cheapest on the energy market because (i) customers are tied into an energy contract for at least a year (unlike variable tariffs, where no period is defined), (ii) early cancellation fees discourage customers from switching suppliers before the end of their contract, which allows for easier planning by the supplier.

Comparing electricity and gas suppliers in June 2014 shows that families moving from an energy plan with a variable tariff to an electricity and gas plan on a one-year fixed-rate tariff stand to save at least £100 and up to £300 per year if consumption is the same as UK national averages.

Saving by switching from a big six to an independent energy supplier

Although independent energy suppliers are not always the cheapest, they tend to offer the least expensive energy plans on the market - the cheapest big six offers are always more expensive than the cheapest energy plans from independent suppliers.

TheSwitch’s electricity and gas suppliers comparison for June 2014 shows that, if using as much electricity and gas as the average household in the UK, customers switching from the cheapest big six supplier to the cheapest independent supplier can save between £60 per year, and up to £200 per year if moving from the most expensive big six energy plan to the cheapest independent supplier electricity and gas plan.

Saving by switching energy suppliers: which are the cheapest?

The energy market in Great Britain changes frequently so it is impossible to establish absolute truths about which supplier is the cheapest. Only a detailed comparison with your electricity and/or gas consumption in your distribution area will provide you with the exact savings you could make by switching suppliers.

However, to give you an idea, these were the cheapest electricity and gas suppliers in June 2014 for average UK energy consumption, viz., 3,200 kWh per year for electricity and 13,500 kWh per year for gas:

  • Extra Energy, First:Utility and Flow Energy’s one-year fixed-rate dual-fuel energy plans are the cheapest dual-fuel energy plans on the market.
  • First:Utility’s two-year fixed-rate dual-fuel energy plan is the cheapest fixed-rate plan with a duration of two years and over.
  • EDF Energy’s one-year fixed-rate dual-fuel energy plan is the cheapest of the Big Six electricity and gas suppliers, and one of the cheapest on the market.
  • Spark Energy’s dual-fuel variable tariff is the cheapest variable tariff on the market, though SSE offers the cheapest variable tariff among the Big Six electricity and gas suppliers.
  • Ovo Energy’s one-year fixed-rate dual-fuel energy plan is the cheapest “green” tariff, though Good Energy, though more expensive, is the only supplier with a green energy certification.
  • Daligas and Zog Energy’s one-year fixed-rate tariffs are the cheapest gas-only plans on the market.
  • Extra Energy, First:Utility and isupplyenergy’s one-year fixed-rate tariffs are the cheapest electricity-only plans on the market.

Saving on bills by switching energy suppliers - a little advice

It is possible to save significant amounts of money on yearly bills by switching suppliers, even if most households do not realise this yet. However, there are over 80 electricity and gas plans in Great Britain so a careful comparison of available tariffs and energy plans is required before switching.

Indeed, potential savings are indexed on household electricity and gas consumption; the figures above are only indicative, even if hopefully they will encourage you to compare energy suppliers to check whether you are on the best plan and, if not, switch to the most advantageous tariff.

Furthermore, potential savings, important though they may be, are not the only issue to take into consideration when comparing energy suppliers in view of switching:

  • Flexibility might be important: Variable tariffs or fixed-rate plans with no cancellation fees ensure that you have the leeway to switch whenever a better tariff becomes available, though these plans may be more expensive initially.
  • Customer service is often crucial: Although one hopes never to have to call customer care, it is important to look beyond prices and see whether the supplier offering the best deal (i) has a competent customer service, (ii) deals with complaints adequately.
  • Increasingly, clean energy is a priority: The greenest suppliers are never the cheapest but their tariffs are no longer the most expensive and if this is a priority it might be worth giving up a few pounds to promote renewable or clean electricity.

As you can see, the best energy deal stems not only from potential savings from switching energy suppliers but on a range of factors that need to be taken into account when comparing what the market offers.

metadescription: 
Looking to switch energy suppliers and save on your energy bills? Here is how much you can save, and how!