Energy prices drop to two year low
A drop in wholesale prices has seen UK energy suppliers offering their lowest rates since 2018 - locking in a low priced fixed rate deal could see you paying around £800 a year for gas and electricity.
What is the cheapest energy deal?
Outfox the Market is the supplier currently offering the cheapest energy deal - its Fix’D 20 11.0 tariff clocks in at just £764 a year for a typical household.
If you prefer to be with one of the Big Six, the cheapest plan on offer from one of the UK’s larger suppliers is a British Gas deal charged at £806 a year.
Npower is the only other Big Six supplier offering a deal that enters the top ten cheapest currently on the market - its Exclusive 12 Month Fix v2 tariff also coming in at £806 a year.
|Supplier||Tariff||Type||Term||Warm Home Discount?||Exit Fee?||Average price per year|
|Outfox the Market||Fix'D 20 11.0||Fixed||12 months||No||No||£764.10|
|Tonik Energy||Green Super Power (1 Year) v4 + Free Boiler Service||Fixed||12 months||No||£60||£770.98|
|Avro Energy||Simple and SuperFixed||Fixed||12 months||Yes||No||£792.85|
|Together Energy||Green Together Fixed May21||Fixed||12 months||No||£60||£797.73|
|Green Network Energy||GNE Spring Sunrise V4||Fixed||12 months||Yes||£50||£798.62|
|Igloo Energy||IGLOO PIONEER||Variable||N/A||No||No||£805.06|
|British Gas||Energy and Home Services May 2021||Fixed||Ends 31/05/2021||Yes||£60||£806.31|
|Npower Select||Exclusive 12 Month Fix v2||Fixed||12 months||Yes||£60||£806.73|
|Yorkshire Energy||Green Flamborough - Fixed until 31st July 2021||Fixed||Ends 31/07/2021||Yes||£60||£811.19|
Is it safe to switch to a smaller supplier?
As you can see from the table above, eight out of the ten cheapest energy deals are from smaller suppliers.
Although saving money is the number one reason for switching, you should also consider customer service and reliability - over the last couple of years, a number of energy suppliers have gone bust, largely because they can’t cope with the demand of the extra custom they’ve gained due to cheaper prices.
This is why you should always check supplier ratings and customer feedback to find out who are the best and worst energy suppliers, to help inform your decision - smaller suppliers often outrank the Big Six on price and customer service, so a bit of research before you switch supplier could really pay off.
Why are energy prices so falling?
There are a number of reasons energy prices are falling, including:
- The coronavirus pandemic and lockdown has seen a drop in demand - although we’re using more at home, overall there has been significant drop in global energy demand.
- There’s been a further drop in demand for gas due a relatively mild British winter.
- We’ve had a very windy winter, which has helped supply more renewable power at lower prices.
- An oversupply of liquefied natural gas (LNG) has led to cheaper gas generation.
Why should you switch energy deals now?
Switching to a fixed rate deal is the best way to protect against energy price hikes. If you switch when prices are low, you have the added bonus of locking yourself into a low rate for at least 12 months.
As the graph above shows, energy prices have been falling for a number of months now, which means it’s a great time to compare energy prices and switch to a fixed rate deal, especially if your current deal is coming to an end or you’re already on your suppliers standard variable rate tariff (SVT) - remember, SVTs are among the most expensive deals and you’ll automatically be rolled onto your supplier’s standard tariff if you don’t switch before your current deal ends.
Can you switch without paying a penalty charge?
If you’re currently on an SVT, you can switch at any time without incurring a penalty charge. If you’re on a fixed rate tariff, your deal might include an early exit fee for cancelling the deal before its scheduled end date - this can be as much as £60 per fuel, which could make a huge dent in any savings you make from switching.
But if your fixed rate deal has entered its final 49 days, then you can switch at any time without being hit with a penalty fee, even if one is included in the terms of your deal.
If you’re unsure when your current deal ends or if it includes an early exit charge, check your latest bill or online account to find out.
How to switch energy supplier
How to switch energy supplier with UKPower. Simply enter your postcode and we'll compare energy prices from a range of suppliers. You then choose the one you prefer and we'll take care of the rest.
Click here to run an energy price comparison, and see if you could be paying less for your gas and electricity.