How to find the cheapest electricity provider?

Energy switching - Senior couple sitting in living room discussing cheap gas electricity.

How do you find the cheapest electricity provider in your area without compromising on the quality of service?

When was the last time you checked your energy tariffs? If it was more than a year ago, you could be paying far more than necessary. A simple search can reveal the cheapest electricity provider in your region – saving you a significant amount of money.

Your bill does not simply reflect how much energy you use. Your postcode also plays a part in determining how much you pay for electricity.

Energy suppliers charge different rates according to your region, even though they are supplying the same service. While there’s not a lot you can do about regional price variations – short of moving house – you can search for the cheapest electricity provider in your area and make sure you’re on the best energy tariff available.

When it comes to energy suppliers, loyalty doesn’t pay. To save money, consider switching to a new electricity supplier – particularly if you’ve stuck with the same company for years and are on a standard variable tariff. These are among the most expensive deals, but the good news is you can switch at any time without penalty.

Ofgem energy price cap

The energy regulator Ofgem recently introduced a cap on poor-value tariffs, including standard variable tariffs. The cap came into effect last year, initially limiting the cost for an average customer on a standard variable or default tariff to a maximum of £1,137 per year when paid by direct debit. While the cost of energy per kilowatt hours is capped, the amount you pay depends on how much energy you use and which region of the UK you live in.

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This was a welcome move, since then the cap has decreased  to £1,042 a year in response to a drop in  wholesale energy costs.  It will be reviewed every April and October and adjusted to reflect wholesale prices.

How much will you save?

Don’t be fooled by the price cap – you can save far more if you compare energy prices and switch to a better deal.

The average household can currently save between £270 and £340 by switching to one of the top 10 cheapest electricity providers on the market.

Victoria Arrington, spokesperson of our comparison-service partner energyhelpline, said, “Even with this price cap, we strongly urge customers to take control and switch to a much cheaper rate – nearly all the best energy deals can only be obtained by switching.

Who pays the most on energy bills in the UK?

Nearly all UK energy suppliers, including the ‘Big Six’, charge different prices depending on the postcode provided. Calculating the average electricity bill in the UK is best done by region.

There is currently a £72 difference between the average annual Big Six energy bill in the cheapest and most expensive regions of the UK, according to energyhelpline. This assumes usage of 3,100kWh of electricity and 12,000 kWh of gas a year.

The table below presents the average Big Six standard variable tariffs by region, including the average dual fuel prices. Often the best dual fuel deals are only a quick search away.

Average Big 6 standard variable tariffs by region

Region

Gas

Electricity

Dual Fuel

East Midlands

£440 £602 £1,042
Eastern £446 £621 £1,068
London £468 £612 £1,080
N Wales and Mersey £456 £657 £1,114
Midlands £451 £611 £1,063
Northern £445 £614 £1,059
North West £454 £607 £1,062
Northern Scotland £457 £641 £1,098
Southern Scotland £457 £613 £1,070
South East £466 £637 £1,103
Southern £470 £608 £1,079
South Wales £450 £628 £1,078
Southern Western £466 £640 £1,106
Yorkshire £443 £609 £1,053

Average

£455

£622

£1,077

energyhelpline – September  1, 2020. All calculations are for an average usage dual fuel household paying by monthly direct debit, paper billing.

Save by paying monthly

As well as moving to a better tariff, you can save money by switching to a monthly direct debit. Suppliers tend to offer money off if you pay this way, as it means less paperwork for them.

Compare energy prices in your area for free

We’ve partnered with independent energy-comparison site energyhelpline to bring you special energy deals that could save you hundreds of pounds a year. The Telegraph’s Energy Switching Service analyses all the tariffs for each region and payment method to find the cheapest electricity provider near you.

To take part, simply register online by entering your postcode and details of your energy supplier, tariff and usage. We will compare offers across the market and contact you with the best deal available. If you decide to switch, energyhelpline will handle all the paperwork for you.

Remember, as well as making sure you’re on the best possible energy deal, you can keep gas and electricity bills to a minimum by ensuring your home is as energy efficient as possible.

Top 10 energy tariffs

Supplier

Tariff

Average annual cost

Average annual savings

Outfox the Market One Green Flex 2.0 £788 £339
Green Palm Tree £794 £333
Outfox the Market One Green Flex 2.0 Plus £804 £323
Igloo Energy Pioneer £805 £322
Avro Energy Simple and SuperGlow £810 £317
Green Woods £817 £310
Robin Hood Energy 12m Summer Saver £821 £306
Ebico 12m Summer Saver £821 £306
Simplicity Energy 2020Cabbage £823 £304
Green Network Energy GNE Summer Sizzler V7 £851 £276

Ways to save energy

Short-term measures

  • Don’t leave electrical items on standby – turn them off fully
  • Draught-proof windows and doors to minimise heat loss
  • Only boil as much water as you need when using your electric kettle
  • Turn your thermostat down – lowering it by just one degree could save you around £85 a year, according to Energy UK
  • Switch the bulbs in your house to low-consumption, longer-life LEDs 
  • Make your fridge and freezer more energy efficient by defrosting them regularly

Long-term measures

  • When replacing electrical items, buy energy-efficient models
  • Consider installing cavity-wall insulation
  • Make sure your loft is properly insulated to stop heat escaping through the roof
  • Install a condensing boiler
  • Fit double-glazed windows

Learn if an Economy 7 meter can help you make further savings on your energy bills.

  • Spending more time at home can result in energy bills rising - Switch now and you could save up to £641*

*10% of customers switching their gas and electricity bills with the Telegraph Switching Service and Energy Club between 1 March 2020 and 30 June 2020 saved £641 or more.

**Correct as of 04/09/2020. Savings calculated against the latest OFGEM energy price cap for average UK home energy bills. UK average dual fuel bill calculated by Ofgem as £1,084 a year.

The above article was created for Telegraph Financial Solutions, a member of Telegraph Media Group Limited. For more information on Telegraph Financial Solutions, click here

Source: energyhelpline

*Information correct at date of publication