How much can I save by switching my energy supply?
This is a question we get asked a lot.
The simple answer is….typically about £300 a year but it will vary.
Summary
Right now, savings are lower than they normally would be. That is because Standard Variable rate tariffs have been cut by the first level of the Energy Price Cap which came into effect on 1 January 2019, whereas prices for the cheapest energy deals have been increasing due to rising wholesale energy costs. Therefore, typical annual savings of over £300 have dropped to £143 for a customer already paying by Monthly Direct Debit and £226 for those who still choose to pay quarterly by cheque or debit card.
Be careful – this situation will not last much longer. Level 2 of the Energy Price Cap has just been announced by Ofgem. With effect from 1 April 2019, the level of the price cap will increase by £117 for those paying by direct debit and by £123 for those paying quarterly. As such, savings will revert right back to historic averages; £301 in fact.
The graph below shows current savings projected forward to April 2019 to show the impact of Version 2 of the Price Cap.
Analysis
Although the annual saving for a domestic energy consumer on a Standard Variable Rate tariff with average energy usage is currently towards the low end of the historic range, this is a temporary distortion caused by the energy price cap. Current savings of around £184 will jump right back up to over £300 once the revised level of the cap kicks in on 1 April 2019.
Customers paying by direct debit see lower savings compared to the quoted average (approximately £40 less) as they are already benefitting from lower energy prices by paying in this way. Conversely, those paying quarterly by cheque or debit card can pick up £40 over the average saving quoted if they also change to paying by monthly direct debit, as they are heavily penalised for paying quarterly.
Methodology
Savings shown compare the price of the Standard Variable Tariffs of the Big 6 energy suppliers with the cheapest* energy deal in the market at the beginning of the month.
Energy usage is based on current Ofgem average typical consumption values being 12,000 kWh a year for gas usage and 3,100 a year for electricity usage.
Analysis is based on Standard electricity meters only (does not include Economy 7 or night time usage meters). If you have an Economy 7 meter please use our domestic energy comparison service to get a customised quote.
Energy bills are calculated for each energy region and then averaged. Average bills are calculated for the 2 main payment methods – monthly direct debit and quarterly by cheque or debit card.
These are then compared with the cheapest* deal in the market at that time. Cheapest* in our methodology means the tariff that satisfies all the following criteria.
- Has a duration of 12 months or longer (short dated tariffs provide no certainty for consumers and cannot be compared on an annual basis).
- Has national coverage (excludes regional tariffs)
- Is widely available to consumers (excludes exclusive deals).
- Does not have onerous payment conditions – for example taking money out of customer accounts before supply start date.
* There may be cheaper tariffs that do not meet these criteria but they are excluded from our analysis for comparability reasons.
Actual Savings
Your actual savings will depend upon your personal circumstances and are affected by the following factors; where you live, how much energy you use, how you choose to pay for that energy (it can make a big difference), your meter type and, most importantly, which supplier and tariff you are currently on. To get a customised quote please pop your post-code into the box below.
If you are new to switching you might want to read our Energy Switching Guide first.
This page is updated frequently so please check back regularly to get the latest insights on what’s happening with UK domestic energy prices.
Last update; 8 February 2019
