Savings from Switching your Energy Supply
Last Update: 13 January 2020
Even after 3 iterations of the energy price cap, the last one cutting energy bills by £75, savings from switching are over £350 for a household with average energy usage.
If that sounds like a lot, that’s because it is. In fact, as the graph below illustrates, it is more than typical savings were before the energy price cap came into effect.
Hang on. Wasn’t the energy price cap supposed to put “an end to rip-off energy prices once and for all”? And wasn’t the energy price cap supposed to do this? By reducing the spread between poor value Standard Variable Tariffs and the cheapest energy deals? Wasn’t this supposed to mean that energy consumers who, for whatever reason, couldn’t or wouldn’t switch would end up overpaying by less.
All of these are in fact correct.
So how is it that the energy consumers are overpaying by more under the energy price cap than they were before the cap came into effect?
In a nutshell, because competitive energy deals have fallen by more than the price cap.
Cheapest energy deals are falling faster then the energy price cap
Under the energy price we’ve had 2 cuts totalling £159 with a massive hike of £117 in between. On balance this leaves Standard Variable tariffs £43 lower than they were before the price cap came into effect.
However, the cheapest deals over the same period have fallen by £79. This means that the price cap hasn’t even managed to keep up with the competitive energy market. Had the price cap not been implemented, it is quite feasible that competition would have driven down the price of SVTs by more than the energy price cap did. But it hasn’t and that means that around 11 million energy consumers, those that can’t or won’t switch, are getting ripped off by even more than they were a year ago.
We hope you are not one of the 11 million getting royally ripped off. If you are, plug your postcode into the box belong and start to do something about it.
In this analysis, the cost of Standard Variable (rip-off) tariffs to is compared with the cheapest energy deals in the market . To get a precise comparison please use our energy price comparison service.
In January 2020, savings from energy switching for a household with average energy usage will be £310 for customers paying by Monthly Direct Debit. However, if you still pay quarterly by cheque or debit card then the saving is a massive £396 a year.
Joe Malinowski, founder of energy price comparison website energyscanner.com commented
The energy price cap has been an abject failure. The cap was introduced so that those customers who, for whatever reason, couldn’t or wouldn’t switch would end up overpaying by less for their energy. The reality is that the energy price cap has failed to keep up with the competitive market and customers are over-paying by even more.”
“The cheapest deals in the energy market have been falling fast. This means that the cheapest deals are now more than £350 cheaper than the Standard tariffs of the Big 5. This presents a great opportunity for consumers. Seasonally energy prices rise over the winter months. so now is a great time to lock in a low price in case they do.”
How we calculate savings from switching your energy supply
Savings shown compare the price of the Standard Variable Tariffs of the Big 6 energy suppliers (as they will be on 1 October 2019) 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 – 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 the following criteria.
- Has a duration of 12 months or longer. Sshort 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. However, they are excluded from our analysis for comparability reasons.
Your actual savings will depend upon your personal circumstances and are affected by several factors. For example, 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. So, if you want to avoid being ripped off with sky high energy prices use our energy comparison service to see how much you can save
Pop your postcode into the box below to check online.
Or call us to get a free independent comparison over the phone…
Also, if you are new to switching you might want to read our Energy Switching Guide first.