Keeping track of the cheapest energy supplier is a never-ending task. One minute you think you know which supplier offers the cheapest energy deals, but the next they’ve been superseded by another company.
Finding a cheap energy supplier is all about comparing the offers available right now. Switching suppliers is more common than many Multi Utility Connections people imagine – from January to May 2019, 2.03million gas customers and 2.49million electricity customers switched suppliers.
New energy deals, new offers and even new suppliers pop up regularly; so, when it’s time to switch, running a price comparison is the best way to find out who the cheapest supplier is.
Read on for information on finding the cheapest energy tariffs, or compare cheap energy deals in your area here.
What does energy cost?
According to Government figures, the average annual electricity bill in 2018 was £699 (£58.25 per month), while gas cost £676 per year (56.33 per month).
A household’s individual bills will vary, depending on various factors. But if energy bills seem unreasonably high, it’s definitely time to start looking around for something better.
One thing that affects energy price is location.
Some regions have higher gas and electricity bills than others, due to things like population density (lots of people in an area usually means a lower cost), and local distribution charges. Energy in Yorkshire is particularly expensive, for example, while the South East is relatively cheap.
Who are the UK’s energy suppliers?
big six energy companies
Most people have heard of the Big Six energy companies. These are the traditional suppliers who used to be the only choices:
Centrica plc (made up of British Gas, Scottish Gas and Nwy Prydain)
Scottish and Southern Energy (SSE)
However, since the market was opened up to competition almost two decades ago, numerous smaller suppliers have appeared, offering consumers more choice in cheap energy deals. There are now around 60 active suppliers in the domestic energy market.
Some small energy firms pop up and then disappear; others work well for a while but end up going bust.
Many smaller suppliers, however, are thriving – challenger firm Bulb, for example, seems on track to hit 1million customers in 2019.
Around a third of the market now belongs to small and medium suppliers.
Small suppliers sometimes specialise in particular energy needs. For instance, EBICo and Good Energy specialise in green energy tariffs. Others are not-for-profit companies.
The vast majority supply both electricity and gas, with a handful only providing one fuel or the other.
The best cheap energy deals right now
Prices of energy deals are always changing, which means that nailing down a cheap deal is a bit like trying to hit a moving target.
The best way to find the cheapest energy deal of the moment is to use a comparison tool, which will take into account your usage and current tariff.
Speaking generally, though, we can look at Ofgem’s latest figures…
Tariff Cost Difference
Big Six standard variable tariff (SVT) £1,254 -30%
Cheapest available tariff £873
…and see that the difference between the Big Six average SVT (see below for more info on that) and the cheapest tariff on the market is £381. That confirms that shopping around is a good idea.
The cheapest energy suppliers
Using average energy use figures provided by Ofgem, for a medium energy user, the current cheapest dual fuel energy deals include:
Supplier Tariff Annual cost Monthly cost
Cheapest Variable Outfox the Market One Variable Tariff 6.0 £847.72 £71
Cheapest Fixed Avro Simple and SuperSave £897.23 £75
Cheapest Big Six Scottish Power Super Saver September 2020 B3 £970.88 £80.91
Prices and tariffs as of 20th September 2019. Based on Ofgem averages for a medium energy user in the South East of England.
Don’t get stuck on an SVT
Some of the most attractive offers are known as fixed rate tariffs, which mean you pay the same per unit no matter what happens in the marketplace. This agreement remains for the duration of your contract (most of which last 12 months).
Once your fixed price deal comes to an end, it’s important that you either renegotiate another deal with your existing supplier or switch to a new one. If you don’t, you could be stuck on what’s known as a standard variable rate tariff (SVT).
These tariffs, which go up and down with market energy prices, are typically around 10% more expensive than fixed rate tariffs in the long run. Yet, in 2018, some 54% of consumers were on a default tariff.