Can you save money by switching energy supplier?

Switching to a new electricity or gas supplier is easy to do and can save you money on your energy bills, according to research conducted by Ofgem the regulator of energy companies in the UK). It is also quick to change your energy provider, with the average switching time between 16 and 18 days. When you move energy supplier, you won’t have your supply disrupted or require any work to be completed on your home or garden.

Find a copy of your latest energy bill, and from this you should be able to find the name of your current energy supplier and tariff, and your most recent usage levels. If you have access to an online portal from your energy supplier, this should have a record of your usage from across the year.

You will need to provide the information about your current supplier, tariff and usage, and postcode to your new energy supplier. They can use this to give you an estimated cost of a new energy deal with them. Some energy providers can complete all this online.

Advertisement

Saving money on energy is important and you will also want to make sure that your new energy supplier provides good customer service. In addition, you should also consider if you want the security of a fixed tariff that locks the unit cost of your electricity or gas for a set period, or if you are happy to accept potential increases. You may also prefer to use a tariff that is sourced from green energy. You should also check that your new energy supplier is registered with the Energy Switch Guarantee – this is a code of conduct for the standards suppliers operate to during a switch.

Ofgem used to publish the levels of satisfaction customers have with the largest six energy suppliers in the UK. This is currently under review and has not been updated since February 2018. The most up-to-date information from the energy regulator is on complaints. The data shows that the average number of complaints to energy providers has declined overall since 2014. Each energy supplier shares the number of complaints received per 100,000 customers.

The last step is to agree the contract with your new energy provider and how you plan to pay your energy bill. Usually, paying by Direct Debit will give you the greatest saving. This is when the switching process starts, and your new supplier will then manage the process. They will advise you of the date your tariff will move to your new energy supplier. If you change your mind, you have 14 days to cancel the contract and must let the energy supplier know.

Just over half of all energy customers in the UK are on an expensive default tariff, according to Ofgem’s State of the Energy Market report. This means they are missing out on the best energy tariffs and have higher energy bills as a result. There is a limit as to how much energy providers can charge you in a single year if you are on a standard variable tariff ( this is often a default tariff if your energy deal has ended or if you have never switched to a new energy deal) of £1,162. But even with this cap, customers that switch to a new energy deal away from the standard or default tariffs will save more money as a result.

Advertisement

According to Ofgem, the average time to switch energy supplier was between 16 and 18 days in its switching data for September 2019. The regulator has also set an automatic £30 compensation payment for those customers whose switch takes more than 15 working days to complete.
The Energy Switch Guarantee (the code of conduct created by the energy suppliers) sets out that energy providers must achieve a switch within 21 days.

The rules from Ofgem state that energy suppliers are not allowed to charge fees if you are in the last 49 days of your fixed-term contract. If you are approaching the end of your current energy provider’s deal, you should ask them if they have any new deals to move to, and then compare these with other energy providers’ tariffs.
If you are still within your current energy contract, then you may have to pay an exit fee before switching to a new energy tariff or provider. Sometimes, if you switch tariffs with the same provider, they will not charge you an exit fee. You can also always ask your supplier if they have any deals that allow you to switch without penalty.
And, even if there is an exit fee or penalty, in some cases you may still be able to save money by switching.

While experiencing a problem with switching is distressing, at least many of the most likely issues are now covered by automatic compensation. Between May 2019 and February 2020, Ofgem reported that of the £700,000 paid in compensation to consumers, 73% was for returning credit balances late and 27% was for switches made by mistake. The full set of automatic compensation rules came into force in February 2020 and now provide £30 in compensation for the following problems:

• Switching without your permission
• A switch takes longer than 15 working days
• Your final bill does not arrive within six weeks of your completed switch
• Not having your credit balance refunded within 10 days.

You can still switch your energy supplier if your debt is less than 28 days old. Anything older than this will need to be repaid first before your switch can take place. Any debt less than 28 days old will be added to your final energy bill from your previous supplier.
If you are in debt to your energy provider and are using a prepayment meter to pay this back, you can switch if you owe less than £500 for gas and £500 for electricity.

If you are renting a property and directly pay the energy bills, you have the right to choose your own energy supplier. This right is granted under consumer protection law. If your landlord is responsible for paying the energy bills, then they will have the right to choose the energy supplier.