Switching Energy Suppliers During a Crisis

Switching energy suppliers can be very important for controlling energy costs, especially in a time of energy crisis. Energy prices can go up and down, so it is key to know how to find and switch to a better deal. The process of changing suppliers is made to be easy. It can also help families save a lot on their energy bills.

In the first part of 2024, energy prices went up by about 27% in the UK. This was because wholesale costs increased. Many homes ended up paying too much money. This happened because they were still using a provider’s standard variable tariff. This tariff is usually the most costly. If you change to a new energy supplier, you can avoid these high costs. You can choose a fixed rate tariff, which helps protect you from future price hikes.

Why Should You Consider Switching Energy Suppliers During a Crisis?

During an energy crisis, prices can go up fast. This can make people pay more than they need for their energy. For instance, in late 2023, 30% of UK homes chose a fixed tariff to escape rising energy prices. A fixed rate tariff can keep your energy bill steady, even when wholesale prices change.

Consumers who have a supplier’s standard variable tariff are more at risk of sudden price increases. Ofgem says that during the 2022-2023 energy crisis, homes on these tariffs paid an average of £300 more each year than those on fixed tariffs. By doing an energy comparison and switching to a better energy deal, households could save between £100 and £350 a year. This depends on which supplier and tariff they choose.

What Is the Process for Switching Energy Suppliers?

Switching energy suppliers in the UK is simple and meant to be easy for customers. A usual switch takes about 21 days. This is part of the energy switch guarantee, which makes sure the process goes smoothly. There will be no interruptions to your electricity supply or gas supply during this time.

Here’s a step-by-step guide:

1. Check your current energy tariff and usage: Before you switch, look at your recent energy bill or log into your online account. Understand your rates, usage, and energy supply. For instance, the average household in the UK uses about 2,900 kWh of electricity and 12,000 kWh of gas each year. Knowing this information will help you compare better.
2. Compare energy deals: Use a price comparison website to find different tariffs from several suppliers. If you want a fixed rate tariff, variable tariffs, or a dual fuel tariff, these websites can help you see deals next to each other. Ofgem says that using a comparison site can help save homes up to £305 a year by switching to the cheapest deal.
3. Choose a new tariff and energy supplier: After you find a better deal that works for you, pick your new energy supplier and tariff. This could be a cheaper rate tariff or a company that focuses on renewable energy. For example, 30% of UK energy consumers changed to a renewable energy supplier in 2023 due to the higher demand for greener options.
4. Initiate the switch: Your new energy supplier will handle the switch for you. They will contact your old supplier and set up the transfer of your energy supply. In the UK, about 500,000 households change their energy provider each month, which is a normal practice to manage rising costs.
5. Provide a final meter reading: On the switch day, submit a meter reading to both your new and old suppliers. This ensures your final bill is correct. It's important to only pay for the energy you used. If you have a smart meter, this may happen automatically as it sends the reading to the supplier.
6. Set up payments: After the switch is done, create a direct debit or other payment method with your new energy provider. A direct debit is often a good choice because it may save you money. Some suppliers give discounts of up to £80 a year for paying this way.

Compare Energy Prices

Thinking about changing your energy provider?

Compare Now

How Can Switching Energy Suppliers Help Save Money?

Switching energy suppliers can help you save a lot of money on your energy bills. This is important if you are on a supplier’s standard variable tariff. Ofgem reports that people on these tariffs paid about £300 more each year than those who chose a fixed tariff in 2023.

Switching to a cheaper rate tariff can help you save money on energy. A fixed rate tariff keeps your price the same, protecting you from price increases in the future. Also, many people who choose dual fuel tariffs, which means getting both electricity and gas from one supplier, often save even more by bundling their services.

Switching suppliers can really help if you are moving to a new home. When you set up your energy supply at a new address, watch out for being put on a standard variable tariff. This option is usually more costly. Do an energy comparison soon after you move in. This way, you can find the cheapest deal for your new household.

What Are the Benefits of a Fixed Tariff During an Energy Crisis?

A fixed tariff keeps your energy prices the same for a specific time, usually one to two years. During an energy crisis, like the one the UK had in 2022, energy prices went up by 27%. If you were on a fixed rate tariff, you would have avoided that jump in costs. This is why many households choose a fixed tariff. They want to feel secure about their energy prices.

Fixed tariffs help you feel calm because the cost for your unit of energy will not go up. This is true even when the market changes a lot. It is especially helpful for homes with credit meters. Your monthly or quarterly bills will stay the same. This makes it easier to plan your budget.

What Are Variable Tariffs, and Should You Choose One During a Crisis?

A variable tariff changes its price based on market conditions. These tariffs can decrease when wholesale energy costs go down, but they can increase significantly during a crisis. In 2023, households with variable tariffs were hit the hardest by rising prices. Some consumers saw their bills go up by as much as £600 a year.

Variable tariffs can be flexible, but they might cause surprise hikes in your electricity bill or gas bill. People who want more stability during an energy crisis are usually told to switch to a fixed tariff. A fixed tariff protects you from sudden price changes.

What Exit Fees Might You Face When Switching Suppliers?

Some energy suppliers may charge you an exit fee if you cancel your contract early. This fee can be between £30 and £60 for each fuel type, like electricity or gas. However, there are ways to avoid these fees:

• If your fixed tariff is about to end in the next 49 days, you can switch without paying an exit fee. This is a great chance to compare tariffs and look for a better deal.
• After signing up for a new tariff, you have 14 days to change your mind. During this cooling-off period, you can switch without facing any penalty.

By knowing the terms of your contract and looking at different rates, you can skip exit fees. This way, switching to a new tariff won’t lead to any surprising costs.

Compare Energy Prices

Thinking about changing your energy provider?

Compare Now

What Happens to Your Energy Supply After Switching?

When you change to a new energy provider, your new supplier will start to provide energy to your home. You will get a final bill from your old supplier. This bill should show your meter reading from the day of the switch.

There is no risk of interruption to your energy supply during the switch. Your prepayment meter or credit meter will work as usual. If you have set up a direct debit with your new supplier, check your online account often. This way, you can confirm that payments are correct and that you are receiving any discounts.

Should You Switch to a Renewable Energy Supplier?

Many UK households are becoming more aware of how their actions affect the environment. Because of this, they are switching to renewable energy suppliers. In 2023, 30% of UK households chose plans that use renewable energy sources like wind and solar. If you switch to a new supplier that offers green energy, you can help reduce carbon emissions. You may also find better pricing with these tariffs.

Switching to a renewable energy supplier is good for the environment. It can also save you money. Renewable energy sources are getting cheaper compared to fossil fuels.

Can Businesses Switch Energy Suppliers During a Crisis?

Yes, businesses can and should change their energy suppliers during a crisis. This helps them avoid paying too much for their electricity supply or gas supply. Different suppliers offer various commercial energy rates. By switching, a business could save hundreds or even thousands of pounds each year.

Energy comparison sites provide special deals for businesses based on how much energy they use and what they need. It is important for businesses to check their energy contracts often. Doing this helps them avoid being put on a supplier’s standard variable tariff. This tariff is usually the most expensive choice.

What Should You Do If Your Current Supplier Goes Out of Business?

If your current supplier goes out of business, you don't need to worry. Ofgem will automatically switch you to a new supplier. Your energy supply will keep going without any disruption. You will also have the choice to change again if you find a better deal. The new supplier will reach out to you with information about your new tariff. After that, you can choose to stay with them or switch to a cheaper energy provider.

FAQs About Switching Energy Supplier During a Crisis