The ability to save money by switching your energy supplier may be about to make something of a comeback, with gas and electricity prices starting to fall.
The difficulties in the energy market have driven up wholesale energy costs, leading to energy suppliers withdrawing their fixed tariff deals. With most households on standard variable tariffs, which are protected by the energy price cap, there has been little in the way of competition.
Instead, largely irrespective of your supplier, if you have usual energy use then your annual bill is likely to be around £2,074, the current level of the energy price cap.
However, movements in the energy market of late have suggested things may be thawing, with the hope that competition will return, giving more of us a reason to switch suppliers and save some money.
What’s more, it’s worth remembering that moving to a fixed deal isn’t the only reason you may want to switch suppliers; if you want to ditch your existing supplier to find one with better customer service, or you’ve moved home and want to start afresh with a new supplier, here’s what you need to know about switching.
Will switching save me money?
Switching energy suppliers is unlikely to save you much money at the moment.
Most households are on standard variable tariffs, and the sums that suppliers can charge on these deals are limited through the energy price cap.
The energy price cap is currently set at £2,074 for the July to September period. Ofgem has announced the cap will drop from October by £151 to £1,923 annually for the typical household.
Over the last few months, we have started to see energy suppliers slowly relaunching fixed energy tariffs, though they come with some important catches. The first is that they are generally limited to existing customers only, meaning you can’t switch over to the new deal from a rival supplier.
A further issue comes in the pricing of these fixed tariffs. They are typically only marginally cheaper than the current level of the energy price cap. So while they may represent an immediate saving, you may end up worse off from having signed up for the fixed tariff.
You will struggle to get out of them too, given fixed energy tariffs tend to come with exit fees.
Despite these issues, the fact that suppliers are beginning to launch fixed tariffs once more is a cause for optimism. As wholesale energy costs drop further, we may see suppliers become more competitive and look to attract customers from rivals.
This could prompt the launch of more fixed rates available to the market as a whole, and not just existing customers, as well as offering a more significant saving compared with variable tariffs covered by the energy price cap.
However, the cost of your tariff is not the only reason you might want to move. Some people opt to switch suppliers because of better customer service from a rival supplier. Alternatively, they may want to move to a green tariff, or perhaps they’d like to take advantage of additional features, like broadband.
So what do you need to know before switching your gas and electricity supplier?
What information will I need to switch?
If you want to switch suppliers, no matter the reason, you’ll need to get some details to hand.
Make sure you have the name of your current supplier, any tariff you’re on, and details on your energy consumption, or at least how much you pay in a year.
You can find all this on your latest bill or annual statement, either on the paper or online version, or phone your energy supplier. Be warned though, this may involve a long wait to actually speak to someone.
How do I make the switch?
There are plenty of ways to identify the energy supplier you wish to switch to, although it’s often easiest to use a price comparison site. Obviously there aren’t many fixed tariffs available at the moment, but it will hopefully make a comeback when the market returns to normal.
Once you have identified your chosen supplier, it’s a case of applying for a particular tariff. That’s when you will need to share some of that information above, such as your typical energy use. The new supplier can then provide you with a quote to give you an idea of what your energy bills will likely look like.
If you’re happy, you can then go ahead with the full energy supplier switch.
How long will the switch take?
Under the Energy Switch Guarantee, the entire switching process takes around 21 days and will all be handled by your new supplier. You don’t even need to tell your current supplier that you are switching.
Suppliers on the scheme must stick to a list of promises including the fact that your supply won’t be interrupted during the switch.
If there’s a problem switching, it’s up to your new provider to resolve it and you get a 14-day cooling off period to change your mind and cancel the switch.
You can of course switch to suppliers that don’t belong to the scheme. However, these guarantees don’t apply, although you can still complain to your new supplier if a switch is handled badly. And beyond that, take your case to the Energy Ombudsman.
Does it cost anything to switch?
This will come down to the tariff you’re on. If you are on a standard variable tariff, there is unlikely to be an exit fee to consider. But if you are on a fixed tariff then you will probably have to pay to leave the deal. The size of these fees can vary significantly between suppliers.
However, energy companies must also allow you to switch penalty free within the last 49 days, or seven weeks, of any current deal.
What happens if I'm moving house?
When you move home, you’ll usually automatically inherit the previous homeowner’s supplier. But you don’t have to stick with them.
You can choose a new supplier and apply to switch, even if just to its standard rate deal.
At least 48 hours before you move, you will need to submit a final meter reading to both your gas and electricity suppliers.
If you don’t have the details of your new gas supplier, you can find this online at Find My Supplier search tool by putting in the postcode and address of your new home.
If you don’t know which company supplies your electricity, go to the Energy Networks Association and use its search tool to find your network operator.
You can then click through to their website and pop in your postcode for details of the new property’s electricity supplier.