How to Find the Cheapest Energy Supplier in the UK

As energy prices continue to soar in the UK, households are feeling the squeeze on their budgets more than ever. The average annual energy bill is expected to reach a staggering £2,500, leaving many consumers searching for ways to cut costs and find the cheapest deal available from energy suppliers. With over 50 providers to choose from, navigating the complex world of energy tariffs and pricing structures can be a daunting task. However, with the implementation of the energy price cap by the UK's energy regulator, Ofgem, consumers can now have peace of mind knowing that their energy bills will not exceed £1,928 from 1 January to 31 March 2024. Consider your options carefully and check out our energy Q&A here for more information on finding the cheapest deal for your household.

In this comprehensive guide, we'll break down the factors that influence energy prices, compare the cheapest suppliers on the market, and provide expert tips for finding the best deals tailored to your household's needs. Whether you're a savvy switcher or a first-time bargain hunter, our ultimate guide will empower you with the knowledge and tools you need to take control of how much energy you're using and your bills.

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Understanding the UK Energy Market: Key Factors Affecting Prices

Before diving into the cheapest energy suppliers, it's essential to understand the various factors that influence energy prices in the UK. By familiarising yourself with these key elements, you'll be better equipped to compare tariffs and make informed decisions about your energy provider.

Wholesale Energy Costs

Wholesale energy costs refer to the price that suppliers pay to purchase gas and electricity from the market. These costs can fluctuate based on a range of factors, including:

• Global supply and demand
• Geopolitical events (e.g., conflicts, trade agreements)
• Weather conditions (e.g., cold snaps, heatwaves)
• Infrastructure issues (e.g., power plant maintenance, pipeline disruptions)

Wholesale costs typically make up around 40% of your energy bill, so any significant changes in market prices can have a substantial impact on what you pay.

Network Costs

Network costs cover the expenses associated with maintaining and upgrading the UK's energy infrastructure, including power lines, gas pipelines, and distribution systems. These costs are regulated by Ofgem, the UK's energy regulator, and are passed on to consumers through their energy bills.

Network costs can vary by region, with some areas facing higher charges due to the complexity or age of their local infrastructure. In 2024, network costs are expected to account for around 25% of the average energy bill.

Environmental and Social Obligations

Energy suppliers are required to contribute to various environmental and social schemes, such as the Energy Company Obligation (ECO) and the Warm Home Discount (WHD). These initiatives aim to reduce carbon emissions, improve energy efficiency, and support vulnerable households.

The costs of these obligations are typically passed on to consumers through their energy bills, accounting for around 12% of the average household's charges in 2024.

Operating Costs and Profit Margins

Suppliers also factor in their own operating costs and profit margins when setting energy prices. These costs can include:

• Customer service and support
• Billing and payment processing
• Sales and marketing expenses
• General administrative costs

While operating costs and profit margins vary by supplier, they typically make up around 10-15% of your energy bill.

Comparing the Cheapest Energy Suppliers in the UK for 2024

Now that you have a better understanding of the factors influencing energy prices let's take a closer look at some of the cheapest suppliers on the market for 2024.

Methodology

To identify the most affordable energy suppliers, we analysed tariffs and pricing data from a range of sources, including:

• Ofgem's price comparison data
• Independent price comparison websites
• Supplier websites and tariff information

Our rankings are based on the estimated annual cost for a typical dual-fuel household with medium energy consumption (2,900 kWh of electricity and 12,000 kWh of gas per year). Prices are averaged across all UK regions and include VAT.

Top 5 Cheapest Energy Suppliers for 2024

As seen in the table above, Outfox the Market currently offers the cheapest dual-fuel tariff for 2024, with an estimated annual cost of £1,992. This is followed closely by Orbit Energy, Avro Energy, Green, and Octopus Energy, all offering competitive fixed-rate deals.

It's worth noting that while these suppliers offer some of the lowest prices on the market, they may not necessarily be the best fit for every household. Factors such as customer service, green energy credentials, and additional perks should also be considered when choosing an energy provider.

Regional Price Variations

Energy prices can vary significantly across different regions of the UK, primarily due to differences in network costs and regional supplier competition. The table below shows the estimated annual cost of the cheapest dual-fuel tariff in each region for 2024.

As the data shows, the cheapest tariffs and prices can vary considerably between regions. For example, households in Yorkshire and the Humber could save around £127 per year compared to those in Northern Ireland by switching to the most affordable deal in their area.

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Factors to Consider When Choosing an Energy Supplier

While price is undoubtedly a crucial factor when selecting an energy supplier, there are several other important considerations to keep in mind. By weighing these elements alongside cost, you can find a provider that offers the best overall value for your household.

Fixed vs Variable Tariffs

One of the first decisions you'll face when comparing energy suppliers is whether to opt for a fixed or variable tariff.

• Fixed tariffs guarantee a set price per unit of energy (kWh) for a specified period, typically 12-24 months. This provides price certainty and protection against rising costs but may limit your ability to benefit from falling prices.
• Variable tariffs, on the other hand, have prices that can fluctuate based on market conditions. While these tariffs may offer lower initial rates, they expose you to the risk of price hikes in the future.

In general, fixed tariffs are a smart choice for households that value budget stability and want to lock in a competitive rate for the long term. However, if you're comfortable with some price uncertainty and want the flexibility to switch providers more easily, a variable tariff, also known as a standard variable tariff, may be a better fit.

Green Energy Credentials

As concerns about climate change continue to grow, many consumers are prefer suppliers that offer renewable energy options. By choosing a green energy tariff, you can support the transition to a low-carbon future while potentially enjoying competitive prices.

When comparing green energy suppliers, look for those that:

• Generate or purchase electricity from renewable sources like wind, solar, or hydro power
• Offer carbon offset programs for gas consumption
• Invest in renewable energy projects and infrastructure
• Have a strong track record of environmental stewardship and sustainability

Some of the top-rated green energy suppliers in the UK include Octopus Energy, Good Energy, and Ecotricity.

Customer Service and Support

While competitive prices are essential, it's also crucial to choose a supplier that offers reliable, responsive customer service. After all, you don't want to be left in the dark if you encounter billing issues or need assistance with your account.

When evaluating a supplier's customer service, consider factors such as:

• Average call wait times and email response times
• Availability of online self-service options (e.g., account management, meter readings)
• Customer satisfaction scores and reviews
• Complaint resolution processes and timelines

You can access customer service data and rankings for UK energy suppliers through resources like Ofgem's Customer Satisfaction Survey and independent review websites like Trustpilot.

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Additional Perks and Benefits

Some energy suppliers offer additional perks and benefits to attract and retain customers. While these extras should never be the sole basis for your decision, they can provide added value and convenience. Common examples include:

• Refer-a-friend bonuses or incentives
• Loyalty rewards programs
• Bundled services (e.g., broadband, home insurance)
• Smart home technology integrations
• Electric vehicle charging discounts or partnerships

When comparing tariffs, be sure to factor in the potential value of these perks alongside the core pricing and service elements.

Expert Tips for Finding the Best Energy Deals in 2024

Now that you have a better understanding of the factors influencing energy prices and the key considerations when choosing a supplier, let's explore some expert tips for finding the best deals in 2024.

1. Regularly Compare Tariffs and Suppliers

One of the most effective ways to ensure you're getting the best energy deal is to regularly compare tariffs and suppliers. By shopping around and staying informed about the latest offers, you can take advantage of competitive rates and avoid overpaying for your gas and electricity.

Experts recommend comparing tariffs at least once per year, or whenever your current fixed-term contract is approaching its end date. Use price comparison websites like Free Price Compare to quickly and easily compare deals from multiple suppliers and make sure you compare standing charge and unit rates to see actual savings.

2. Provide Accurate Consumption Data

When comparing tariffs, it's essential to provide accurate information about your household's energy use consumption. This ensures that the estimated annual costs and savings presented are as realistic as possible for your specific circumstances.

To get the most accurate quotes, gather your recent energy bills and enter your actual consumption data (in kWh) into the comparison website. If you don't have access to your bills, you can also estimate your usage based on factors like your home's size, occupancy, and typical appliance use.

3. Consider Dual-Fuel Tariffs

If you currently have separate suppliers for your gas and electricity (commonly known as dual fuel energy tariff), consider switching to a dual-fuel tariff. These tariffs combine both services under a single supplier, often offering discounted rates and streamlined billing.

While dual-fuel deals can be convenient and cost-effective, it's still important to compare them against standalone gas and electricity tariffs (dual fuel tariffs) to ensure you're getting the best overall value.

4. Look for Paperless Billing and Online Account Management

Many suppliers offer discounts for customers who opt for paperless billing and manage their accounts online. By eliminating the need for printed bills and correspondence, these options can help reduce administrative costs and environmental impact.

When comparing tariffs, look for those that offer paperless billing incentives or require online account management. Just be sure to factor in any potential drawbacks, such as reduced customer service options or the need for regular internet access.

5. Take Advantage of Energy Efficiency Schemes and Grants

In addition to finding competitive tariffs, taking advantage of energy efficiency schemes and grants can help you reduce your overall consumption and costs. Some popular programs and incentives for UK households include:

• Energy Company Obligation (ECO): Provides free or subsidised insulation and heating upgrades for low-income and vulnerable households.
• Warm Home Discount: Offers a one-off £140 payment towards winter energy bills for eligible low-income and pension-age households.
• Green Homes Grant: Offers vouchers of up to £5,000 (or £10,000 for low-income households) to cover the cost of energy efficiency improvements like insulation, double glazing, or low-carbon heating.

By combining these schemes with a competitive energy tariff, you can maximise your savings and make your home more comfortable and environmentally friendly.

6. Use Smart Meters and Energy Monitoring Tools

Smart meters and energy monitoring tools can help you better understand your consumption patterns and identify opportunities for savings. These devices provide real-time data on your energy usage, allowing you to track your spending and make informed decisions about your habits.

Most energy suppliers are offering free smart meter installations as part of the UK government's national rollout program. If you haven't already, contact your supplier to arrange a smart meter fitting or inquire about other energy monitoring tools they may provide.

7. Don't Be Afraid to Negotiate or Switch

Finally, don't be afraid to negotiate with your current supplier or switch to a new provider if you're not satisfied with your current deal. Energy suppliers are often willing to offer retention deals or match competitor prices to keep your business.

If you decide to switch, be sure to review your current contract's terms and conditions to avoid any early termination fees or penalties. Use price comparison website to initiate the switch and provide accurate meter readings to your old and new suppliers to ensure a smooth transition. Also consider fixed price, energy meter, better customer service, payment method such as direct debit when looking to switch energy supplier.

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Frequently Asked Questions About Finding the Cheapest Energy Suppliers

1. How often should I compare energy tariffs and switch suppliers?

Experts recommend comparing tariffs and considering switching suppliers at least once per year, or whenever your current fixed-term contract is approaching its end date. This ensures you're always getting the most competitive rates and not overpaying for your energy.

2. Can I switch energy suppliers if I rent my home?

In most cases, yes. If you pay your energy bills directly to the supplier (rather than through your landlord), you have the right to choose your own provider. However, if your landlord pays the bills and then recharges you, you'll need to discuss switching with them first.

3. What happens if my energy supplier goes out of business?

If your energy supplier goes out of business, you'll be automatically transferred to a "supplier of last resort" appointed by Ofgem. Your energy supply will continue uninterrupted, and any credit balances will be protected. However, you may be placed on a more expensive tariff with the new supplier, so it's important to compare deals and consider switching as soon as possible. Most suppliers are part of the Energy Switch Guarantee, which guarantees a hassle-free process for customers, so you can switch with confidence and find the cheapest energy supplier for your needs. Additionally, if you have any issues with your old supplier during the switching process, the Energy Switch Guarantee ensures that they will handle the process and communicate with your new supplier on your behalf.

4. How long does it take to switch energy suppliers?

Switching energy suppliers typically takes around 21 days, including a 14-day "cooling-off" period during which you can cancel the switch if you change your mind. Your new supplier will handle the entire process, and there should be no interruption to your energy supply.

5. Will I be charged an exit fee for switching energy suppliers?

It depends on your current tariff and contract terms. Some fixed-term tariffs include exit fees (usually around £30 per fuel) for switching before the end date. However, many suppliers waive these fees if you switch within the last 49 days of your contract. Be sure to review your terms and conditions before initiating a switch to avoid any unexpected charges. Additionally, some energy providers may offer to pay your exit fees if you switch to their services, so it's worth checking before making a decision on whether or not it is worth switching.

6. Can I switch energy suppliers if I have a prepayment meter?

Yes, you can switch energy suppliers even if you have a prepayment meter. However, your options may be more limited, as not all suppliers offer prepayment tariffs. Use an accredited price comparison website to find the best prepayment deals and follow the switching process as normal.

7. What are the benefits of choosing a green energy tariff?

Choosing a green energy tariff offers several benefits, including:

• Supporting the transition to a low-carbon future by increasing demand for renewable energy
• Potentially reducing your carbon footprint and environmental impact
• Encouraging suppliers to invest in renewable energy projects and infrastructure
• Enjoying competitive pricing, as many green tariffs are now cheaper than traditional fossil fuel-based options

By switching to a green energy tariff, you can help contribute to a more sustainable future while potentially saving money on your energy bills.

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References

• [1]www.ofgem.gov.uk
• [2]www.gov.uk
• [3]energysavingtrust.org.uk