We’ve seen energy bills fall due to cuts in the energy price cap. For a typical household that uses gas and electricity and pays by direct debit, the cap dropped on 1 July 2024 from £1,690 to £1,568 per year – a reduction of £122, or around 7%. That’s a long way from the eye-watering £3,280 price cap on 1 April 2023, but is still a significant sum and it may rise again later in 2024.
You may already be on the cheapest deal, but some households can cut their bill by switching, so it’s worth checking.
Here we’ve set out what you need to know, from the types of tariffs to a step-by-step guide to switching.
Tariff. A tariff is a pricing plan that energy providers use to charge customers for their electricity and gas use. The price you pay for your energy use will depend on the tariff you sign up for, like a mobile phone plan.
Kilowatt-hour (kWh). A kilowatt-hour is the unit of energy that suppliers use to bill households for their energy use. Each energy tariff will charge customers an amount per kWh used.
Standing charge. Energy suppliers also typically charge a fixed daily fee for providing you with energy, no matter how much you use. This is charged for each energy source, so if you have gas and electricity you’re charged 2 separate standing charges. Customers who pay by monthly direct debit will usually receive a bill listing 2 amounts: the cost of energy used and the total standing charge for that period.
We’ve set out the key need-to-knows for the different types of energy deals available, including any fees involved.
This type of energy tariff, sometimes called a standard variable rate (SVR) or “default” tariff, is one where the unit price you pay for your energy can go up and down with the energy market. You’re not locked into a contract, so if you find a cheaper tariff elsewhere you can switch without any exit fees. But these tariffs are rarely the cheapest deal.
This locks in the unit price of your energy for a period of time: 1, 2, 3 or even 5 years. This can be a way to guard against future price increases caused by fluctuations in the energy market. However, you’ll typically be hit with a penalty fee if you want to switch before your fixed contract period is up.
This just means you’re getting electricity and gas from the same supplier. Sometimes referred to as “bundling”, dual fuel energy tariffs can be cheaper, as suppliers have even more reason to want you to stay.
Designed to encourage you to use energy at times when supply is cheaper, these charge different unit rates depending on the time of day you use energy. Economy 7 is an example. These plans charge less for energy consumed at off-peak periods, usually a 7-hour period from late at night to the early hours of the morning, hence the “7” in the name.
These tariffs are for those who have a pre-payment meter and pay in advance for gas and electricity by topping up their meter using prepay tokens, cards or a key. This is typically one of the most expensive ways to power your home.
A “green” tariff can be 1 of 2 things: Either the supplier will promise to match your usage with generation from renewable sources of energy, or it will contribute towards environmental schemes on your behalf.
This is where you’ve installed solar panels or wind turbines at your property, and the energy suppliers pay you for the energy you produce. There are no longer any new feed-in tariffs available on the market, but existing customers with feed-in tariffs can switch suppliers without losing the payments they receive from selling energy back to the national grid.
To illustrate how much it’s possible to save by shopping around for your energy supplier, here is an example of 2 dual fuel tariffs (paid by direct debit) with prices fixed for 12 months for a 3-bedroom home in the Birmingham suburb of Edgbaston.
These projections are based on dual fuel tariffs paid by direct debit and fixed for 12 months. Usage figures are based on typical annual domestic consumption values published by industry regulator Ofgem. These are 11,500kWh for gas and 2,700kWh for electricity.
You can check whether you can make savings by using the free, quick tool on our partner Uswitch's site.
Although price is a huge decider when it comes to picking your energy provider, it shouldn’t be the only factor at play. You’ll want to choose the provider that’s trusted and holds a good reputation for the way it treats its customers.
While picking from this ever-changing list can be daunting, shopping around and doing your research can help you to find the perfect option, whether you’re looking for the cheapest deal on the market, renewable energy, great online service, smart meters or a local firm.
Here are the suppliers that the charity Citizens Advice gave the highest customer service scores for October to December 2023, based on data from industry regulator Ofgem, customer surveys and information from the suppliers themselves.
Let’s look at some of the key players.
British Gas remains the largest energy provider in the UK, supplying more than 7 million households. It used to be the sole energy provider for the UK, until it was privatised in 1986.
The majority of online reviews and studies state that the range and price of tariffs, as well as the level of customer service, is pretty mediocre. To be fair, the firm has improved and widened its services in recent years, but customers’ experiences are still mixed. If you’re a traditionalist who doesn’t like to try out new companies, British Gas is the energy supplier for you.
Indeed, statistics suggest that a fair percentage of its customers have stayed loyal for an incredibly long time.
E.ON Next is the second largest energy provider operating in the UK in customer numbers after British Gas. It forms part of what used to be called the Big Six energy companies. The German company serves over 5.6 million British households.
The electricity used by its residential customers on fixed tariffs is backed by 100% renewable sources.
It is rarely ranked among the best companies for price or customer service, but if you’re after a large energy provider which focuses on renewable energy, E.ON Next could be next on your list.
French-government-owned EDF Energy is another one of the former Big Six energy companies. It controls many of the UK’s nuclear power stations and two-thirds of the electricity it supplies its customers comes from nuclear energy.
As is typically the case with larger “legacy” suppliers, it’s rarely listed among the best-value tariffs, nor praised for having the best customer service.
EDF prides itself in offering lengthy fixed-rate tariffs – some as long as 3 years – so it might be the provider for you if you’re worried about mid-contract price rises.
ScottishPower is based in Glasgow, but serves energy to customers all over the UK. It was founded in 1990 and grew to become a Big Six provider. Now owned by Spanish utilities giant Iberdrola, it’s the largest supplier of renewable energy generated by wind in the UK. In fact, its green energy tariffs are generated 100% from its UK wind farms.
ScottishPower isn’t well-known for fantastic prices or mind-blowing customer service, but it does offer fixed-rate contracts up to 2 years.
OVO Energy has established a reputation as a strong green energy provider. In 2020, the Bristol-based supplier acquired the domestic energy division of former Big Six competitor SSE.
It was the first supplier to remove coal and nuclear from its energy mix and has received plenty of plaudits for its “Plan Zero” initiative to create a zero-carbon future. If you want to do your bit for the environment while still paying a competitive rate for your energy, check OVO’s tariffs.
Since launching in 2016, Octopus Energy has raised the bar for customer service in the energy sector. It offers 100% renewable energy, yet still manages to offer competitive prices among its energy tariffs. Octopus has been growing pretty quickly and now supplies over 5 million UK homes.
In recent years the supplier, which is backed by the UK financial services group of the same name, has grown through acquisitions and deals with firms like Co-op Energy and Engie. Its offering is relatively simple, providing a choice of supply deals including fixed, variable and “supergreen” tariffs, none of which charge exit fees. If you’re looking for competitive tariffs with strong green credentials, this cephalopod is certainly worth a look.
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