Skip to main content
Blog Post 1 April 2021

How to switch supplier and reduce your energy bills

We compare prices for many things in life, yet many of us don’t think about doing this when it comes to our energy bills. Many people, particularly those who are on their supplier’s standard variable tariffs could be paying too much for their energy – and they may not be supporting renewable energy.

A 2019 Ofgem survey found that although engagement has increased recently, just under half (49%) of people had considered switching their energy supplier, changing their tariff or comparing supplier.

For most people, the chance to save money by switching supplier or tariff remains the strongest motivation. However, increasingly consumers are also motivated by wanting a ‘greener’ tariff, with 10% saying this was a factor in their decision to switch energy supplier or tariff.

Where to start

With a wide range of switching services available, there’s no need to stick with an expensive standard variable rate. By switching to a green tariff, you can also show support for renewable energy, which will be essential to helping the UK to reach its net zero targets by 2050.

There are several comparison sites that can help you find a better deal, but be careful – they may not always show you every available tariff on the market. Citizens Advice has a price comparison tool, which always compares prices and a provides a customer service ‘star rating’  from the full range of UK suppliers.

If you’re looking to switch your energy supplier, it’s important to do some research to find out what’s out there. You should also decide what’s important to you – whether that’s cost, renewable energy or customer service.

All you need to start your research is:

  • your postcode
  • the name of your current supplier
  • the name of your current tariff

If you know how much energy you use each year, which includes both your gas and electricity consumption, you’ll get a more accurate quote from a new supplier. You can find this information on your annual statement (if you have one) – it’s measured in kilowatt hours (kwh).

What sort of tariffs are there?

01

Standard variable rate

This is usually the energy supplier’s default tariff. You may sometimes be switched on to the standard variable rate following the end of a fixed rate tariff. If you haven’t switched tariff for a long time, you may well be on a standard variable rate.

These rates offer flexibility. You’re not tied into a contract with a fixed end date and you won’t be charged any exit fees should you wish to change supplier.

However, there’s no protection against price increases on a standard variable rate and it’s often not the cheapest available.

02

Fixed rate

A fixed rate is exactly that; you pay a defined amount for each unit of energy until a set end date. Fixed rates often last for a year, although these can also be for longer periods, such as two years or five years.

These rates offer peace of mind – you know how much you’re going to pay and rates are often much cheaper than standard variable rate tariffs.

However, you’re often locked into the deal for a set period of time. Also, remember it’s only the unit price that’s fixed – you’re still paying for the quantity you use and your bills can still go up if you use more energy.

03

Dual fuel

A dual fuel tariff is where you receive gas and electricity from the same supplier.

Energy companies will often offer a reduced rate for dual fuel customers and choosing a dual fuel tariff means you’re only dealing with one energy company.

However, the discount offered to dual fuel customers aren’t always as much as choosing individual electricity and gas suppliers. You need to check the savings carefully.

04

Green tariffs

Many energy suppliers offer green tariffs, which can either mean they’ll match your usage with renewable energy generation, or they will contribute towards environmental schemes on your behalf.

These tariffs offer a positive way to tell the energy industry that you want to support renewable energy. However, they’re not always the cheapest. And the ‘green’ aspect of the tariffs isn’t entirely straightforward either – as we consider below.

Why choose a green energy tariff?

With electricity from low carbon sources making up an ever-larger percentage of our national grid, we are all likely to be using some sustainably generated electricity, whatever tariff we’re on. So, what’s the benefit of a green tariff in particular?

Choosing a green tariff shows the demand is there. It sends a message to your supplier and the wider industry that you wish to avoid electricity generated from fossil fuels and support renewable energy generation. The increasing numbers of green tariffs available shows the industry is listening.

A green tariff means that some or all of the electricity you buy is ‘matched’ by purchases of renewable energy that your energy supplier makes on your behalf. These could come from a variety of renewable energy sources such as wind farms and hydroelectric power stations.

Watch out for greenwash

However, while some green tariffs will directly supply renewable energy, others involve energy companies purchasing renewable energy guarantee of origin – or REGO – certificates on the open market.

These certificates are issued to renewable energy generators for each megawatt hour of renewable energy generated. They can sell any excess certificates created at times of surplus to non-renewable energy generators, who then use them to create a ‘green tariff’. Unfortunately, these tariffs do little to encourage the generation of renewable energy in the UK.

Your supplier should let you know what sources are included in the mix, and also what proportion of your supply is renewable. Some tariffs will be 100% renewable, while others will offer a percentage of the total.

Will I get charged for switching?

Some fixed tariffs do have an exit fee – however, many are free to leave at any time. If you’re on a standard variable tariff, there are no exit fees in any event.

Am I protected by the price cap?

On 1 April 2021, Ofgem introduced a price cap increase to £1,138 after an increase in energy demand pushed up wholesale energy prices. This brings the price cap back to pre-pandemic levels and will mean that consumers could end up paying more on their energy bills.

The price cap regulates the maximum amount energy suppliers can charge for supplying gas and electricity. While the price cap provides some protection against excessive charges, it only stops high charges rather than offering low ones.

So, what does this mean for you? For six months from 1 April 2021, the price cap will increase by £96 for 11 million default tariff customers, and by £87 for four million pre-payment meter customers.

We have more advice on how to switch your energy supplier or tariff, including tips on how to reduce your bills if you’ve already switched.

Last updated: 31 March 2021