Is switching utility suppliers worth the hassle?

When I moved into my first home in the UK I was given this bit of advice: “switch energy suppliers each year. You’ll save a lot of money that way.” Years later, I have only done this once. And I often think about this when my energy bill is paid. Am I overpaying?

In short, yes. I am making the same mistake as millions of Brits and missing out on average savings of £250 per year.

A bit of clarity about what it means to switch energy suppliers

People often switch their energy supplier to get a lower price. But there are other reasons that may be important to you, such as customer service, the environmental friendliness of the energy sources (some offer 100% wind energy, for example), or the flexibility of the energy tariff.

For your part, the only difference you will notice after switching is the new company's name on your energy bill.

And when switching suppliers, you do not need to worry about losing power: you will not be without gas or electricity at any point. Keep in mind that your energy (gas and electricity) supplier is not the same as the local utility companies that maintain the wires and pipes connecting power to your home. Those remain the same no matter which supplier you choose.

Changing suppliers is an option for everyone, so it doesn’t matter if you own your home or rent it.

Why does changing energy suppliers cost less?

The energy market is competitive. New players enter the market all the time. They mainly compete for your business with better customer service and lower prices. 

Chances are, your old supplier won’t have the most attractive offer on the market. 

How to switch energy suppliers in about five minutes

The main reason Brits don’t switch their energy supplier is that they haven’t shopped around. Even though their potential savings are well worth the effort

This procrastination is our undoing, and completely unnecessary. It’s easy and quick to shop around and switch. A few sites do all the work for you.

If you want to switch suppliers, here’s what you need to do:

1. Gather these bits of info:

  • A recent energy bill. You need to know your current supplier and tariff (this is on your bill)
  • Your bank details. This is so you can set up with a new supplier

2. Use a comparison site to compare energy deals. 

There are too many energy suppliers for you to look them up individually. So use a service that scans all the suppliers and deals available to you in your area. 

Popular UK energy comparison sites recommended by Ofgem – the government regulator for UK’s gas and electricity markets – include:

Another good one is Look After My Bills, which always keeps you informed when better energy deals are available. It can also automatically switch you to the best deal when your current deal ends, year after year. 

3. Pick one. 

Once you have found the best deal with the energy comparison sites, you’re nearly done. 

These comparison sites not only help you find and compare energy deals, but provide free and easy switching service, including cancelling your old service and transitioning you up to the new one. 

Does it cost to switch? 

It depends on your current contract. If you have a standard variable tariff, you can switch any time for no charge. 

If you have a fixed-term energy deal, you may have an exit fee attached if you leave early. But don’t be too concerned, the potential savings of switching to a better deal can still be greater than the fee. 

How long does it take to switch energy supplier? 

You can switch suppliers within a month of submitting the switch request. According to UK Power, switching energy suppliers should take no more than 21 days and sometimes only takes 17 days.

How often should I consider switching? 

Is switching energy suppliers worth it? Yes. But how often should you do it? 

Check the terms and conditions of your contract, as there may be penalties for switching in less than a year. The most sensible course is to look once per year for cheaper alternatives. Or use an auto-switching service so they can move you to the best deals when it makes financial sense to switch. 

Whatever you do, use an app like Money Dashboard to consolidate your finances and understand what percentage you are spending on utilities. If this is too high then you should consider switching.

Disclaimer

All content is for informational purposes only and is the opinion of the author. Nothing on this website should be interpreted as "advice". Money Dashboard Ltd make no representations as to the accuracy, completeness, suitability or validity of any information on this site and will not be liable for any errors or omissions or any damages arising from its display or use.

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