How To Compare Energy Prices: A Guide For Consumers

Comparing energy prices is an essential way to reduce your energy spend and prevent your bills from spiralling out of control. In theory, it’s both quick and easy to compare energy prices. Especially with all the price comparison websites out there. But how do you know you’re getting great value for money after you compare energy prices? How do you know that the price on screen will match your actual usage. What’s stopping the price of energy from rising, and what can you do when it does?

Last update: October 2021

As you may have heard on the news, the UK energy market is currently under an immense amount of stress as a result of a global gas shortage driving up costs and putting several energy suppliers out of business. To learn more about this and stay updated on a daily basis you can read our page on the UK energy crisis.

Before you compare energy prices, it’s a good idea to get an understanding of the energy market and why it’s so advantageous to keep switching suppliers. Here, we’ll look at everything you need to know to compare energy prices effectively.

Who is the cheapest energy supplier?

Energy prices are always changing with new tariffs and rates being offered all the time. The cost of your energy depends on a number of factors, including:

  1. Where you live
  2. How much energy you use
  3. Your tariff
  4. Your energy choices

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However, some suppliers do tend to be cheaper than others. Based on the average use statistics in the UK for a medium user in the south, as supplied by the regulator Ofgem, the cheapest suppliers are as follows:

Type of tariff 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

Which energy supplier is the best?

Is cheaper better than greener? Is a better customer service more important to you than no exit fees? It’s hard to give a definitive answer to this question about which supplier is best. It depends on your own individual requirements and expectations.

However, there are certain ways to compare other people’s and independent body’s experiences. One of the main ones is to look at the Which? annual survey of the major energy suppliers. This rates suppliers on an annual basis, based on the reviews and experiences of actual customers. While this is not a definitive list of the best suppliers, it is a useful guide to see who is performing well.

For 2019, the list of top suppliers was:

  1. Octopus Energy
  2. Ebico
  3. Bulb Energy
  4. Pure Planet
  5. People’s Energy

Ratings metrics including customer service, bill accuracy, digital tools and value for money, with several thousand customers being asked for their opinions about suppliers in each category.

How much can I save by switching energy suppliers?

On average in the UK, around 60% of homes could be paying around £300 more than they need to for their energy each year. That’s because many of these are simply sitting on standard variable energy tariffs, the most expensive of all tariff options. By switching in in a matter of minutes, it might be possible to save hundreds of pounds.

How do I compare energy prices?

At Switch-Plan, we pride in making it as fast, effective and hassle-free as possible to switch energy suppliers. But while we provide a free and comprehensive service, we think that energy consumers benefit from learning how to compare energy prices on their own.

Comparing energy prices is easier when you understand all the variables of the energy market, and what makes suppliers (and their prices) so very different. To compare energy prices effectively, you’ll need to gather some information together that will help you to make accurate comparisons. These will prevent any unpleasant surprises when your energy bills start to arrive. This includes student energy bills.

What information do I need to compare energy prices?

To compare energy prices, you will need your home address and postcode, as well as the name of your current supplier and (ideally) the name of your current tariff. This will allow you to find out how much you could save compared to what you’re currently paying. If you’re not sure who currently supplies your energy, you can find out by contacting your Distribution Network Operator (DNO) or gas transporter.

Most price comparison services will ask you to submit your annual or monthly usage. This is information that your current energy supplier will be able to provide for you. If you don’t have this to hand, you can always get an estimate depending on whether your usage is low, moderate or high. But the more accurate your usage statistics, the more likely you are to get quotes that reflect your energy consumption.

It can be very frustrating when the bills you receive bare no relation to the quotes given to you when comparing energy prices.

How long does it take to switch energy suppliers?

Switching energy prices is a relatively fast and completely seamless process. You’ll experience no loss of service once your new energy company takes over your supply. What’s more, it’s quicker than ever to switch suppliers, with most switches taking less than 15 days to complete. If your switch takes longer than this, you may be entitled to £30 credit in compensation from your new supplier.

What if I change my mind?

The energy watchdog Ofgem stipulates that energy consumers are entitled to a 14 day “Cooling Off” period after switching to a new supplier. Within this timeframe, you can switch without any consequences or penalties, even if you has switched to a fixed-rate energy plan with early exit fees.

What to look out for when comparing energy suppliers

At the time of writing, there are over 50 active energy suppliers to choose from. Yet many UK consumers seldom switch outside of the “Big 6” energy suppliers. British Gas, SSE, N Power, Scottish Power, E.On and EDF have a market share of around 70% between them. Yet there are many lesser-known suppliers that are more competitively priced and eco-conscious.

Many energy consumers don’t know what to look for in a new energy supplier, and as such rarely stray from the familiarity of these big names. But when you know what to look for in an energy supplier, you can compare energy prices from a huge range of gas and electricity suppliers with confidence.

Unit rates per kWh

These are the rates that you pay for every single unit (kilowatt hour / kWh) of gas and electricity that you use. Make sure you report your usage every month, or install a smart meter to ensure that your Direct Debits are accurate and reflect your usage. Otherwise you could find yourself with needlessly high energy bills based on estimates. Unit prices can vary depending on where in the country you live. In a related article, you can find information about the average energy bill.

Standing charges

As well as your unit prices, most energy companies will also apply a daily standing charge for your energy bill. There are a couple of tariffs available with no standing charges from suppliers like Utilita, Good Energy, N Power and E.On. However, you should think twice before choosing these. An absence of standing charges invariably means much higher unit rates. You’re only likely to benefit from these rates if your usage is very low and / or if your property is unoccupied for much of the year.

Tariff Comparison Rates

A Tariff Comparison Rate (TCR) allows you to measure how much you could save by switching energy suppliers. It factors in unit rates, standing charges and any discounts such as dual fuel discount or special promotions for new members. These make it easier to compare energy prices directly.

Exit Fees

When comparing energy prices, you’ll likely see a combination of fixed and variable-rate tariffs. We’ll get into the comparisons between the two shortly. However, it’s worth noting that many (but not all) fixed-rate tariffs will carry an early exit fee if you switch suppliers before your contract expires. This usually varies between £20 and £50 per fuel. However, there are some suppliers that will pay your early exit fee on your behalf when you switch.

You can also switch without paying an early exit fee if you change you do so within the 14-day “cooling off” period, or within 49 days of your contract’s expiry.

Variable or fixed-rate?

Broadly speaking, energy tariffs fall into two categories. These are variable and fixed-rate. A variable rate changes over time, rising and falling in line with the wholesale cost of energy. At the time of writing, this is actually a good thing as wholesale energy costs have been relatively cheap because of the low price of crude oil. However, when wholesale energy prices rise, so will your bills.

Fixed-rate tariffs lock in the rate you pay over a fixed period. This is usually 12 or 24 months. After this rate expires you will be automatically moved to a variable rate unless your supplier automatically chooses the best rate for you.
In the table below, you’ll see a side-by-side comparison of the benefits of fixed and variable tariffs. You should consider these when you compare energy prices and tariffs.

Variable-Rate Plan Benefits Fixed-Rate Plan Benefits
Completely flexible, so you can switch plans whenever you like. Can often be cheaper than variable rate plans.
Good value for money at the moment as wholesale energy prices are low. Makes it easier to predict energy costs and manage your budget in the long term.
You pay less when wholesale energy prices drop. Can come with discounts and free gifts as energy suppliers are keen to get a long-term commitment from customers.
Energy companies are obliged to provide 30 days’ notice if your energy plan is going to go up. That’s more than enough time to switch to a cheaper plan. Most energy suppliers have at least one fixed-rate plan, so there’s a lot of choice on the market.
Most fixed-rate tariffs also carry a dual-fuel discount.

Fuel Mix

A supplier’s energy fuel mix tells you where the energy they use comes from. These may come from either renewable sources like solar, wind, hydro and biomass, fossil fuels like coal, oil and gas, or from nuclear power which is carbon-neutral but not technically renewable as it uses finite materials such as uranium. Some suppliers offer only 100% renewable energy, while others offer at least one 100% renewable tariff, but don’t have a completely renewable fuel mix.

You could be forgiven for assuming that a renewable supplier or tariff is more expensive. However, many of the cheapest energy suppliers on the market are also the cheapest.

Understanding energy prices

When you compare energy prices, it becomes apparent that there’s often a significant gulf between the highest and lowest prices on the market. Because there’s so much variation in price between different suppliers and tariffs, energy consumers could be forgiven for assuming that energy companies just make their prices up as they go along. However, the better your understanding of how energy prices are defined as well as when and how they change, the easier it is to make an informed decision about which supplier and tariff offers the best value for money.

How are energy prices defined?

As previously stated, one of the biggest contributing factors to energy prices is the wholesale cost of energy. However, this is not the only cost that suppliers bear in getting energy to your home. There are also the costs associated with running a call centre, complying with Ofgem’s renewable obligations, and good-old-fashioned supply and demand. Larger suppliers tend to have greater operational costs and therefore can often be more expensive. On the other hand, choosing an online-only supplier or tariff can result in great savings, as long as you don’t mind getting all of your customer service online.

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Generally speaking, the energy industry operates on razor-thin profit margins that are usually recovered through your daily standing charges. This is the reason why so many smaller energy suppliers experience terminal cash flow crises and go out of business.

How often do energy prices change?

The truth is that energy prices are in a constant state of change. Wholesale energy costs tend to fluctuate in line with the cost of crude oil. Fluctuations in energy costs are usually fairly negligible, and energy companies can usually absorb these fluctuations within their variable rates. When energy costs rise to the point where they can no longer be covered, energy companies will raise their variable rates. However, they are obliged to provide customers with 30 days’ notice before doing so.

This is the reason why many energy consumers prefer fixed-rate tariffs over variable-rate tariffs.

What is the Ofgem Energy Price Cap?

The energy regulator Ofgem aims to keep energy prices reasonable and ensure that the market is competitive in order to generate the best possible value for the consumer. In order to prevent energy costs from spiralling out of control, the energy price cap was established in early 2019. This assures customers that energy costs will never rise above a certain amount in any given year, and the cost of non-compliance for energy companies is high.

At the time of writing, the energy price cap is set at £1,042 for the year. It is revisited every 6 months, and is due for revision in April of 2021. You can see historical energy price cap data in the table below:

Date Energy Price Cap Amount
January 2019 £1,137
April 2019 £1,254
October 2019 £1,179
April 2020 £1,146
October 2020 £1,042

How much can I save by switching energy suppliers?

Believe it or not, we as a nation are spending over £800 million more than we should be for the energy we use. There are a number of reasons for this, but one of the most egregious is that we’re staying with the same suppliers for too long. Sometimes we spend years on expensive deemed contracts paying the least favourable rates offered by our suppliers on variable plans. It’s estimated that the average household could save around £300 a year by switching suppliers regularly.

What is a dual fuel tariff, and why should I consider switching?

A dual fuel tariff offers a discount to customers that choose to get both gas and electricity from the same supplier. Dual fuel rates are offered on many fixed-rate tariffs. As well as making them potentially cheaper, these rates also make your energy account easier to manage. That said, the cheapest energy deal for your home may not necessarily be a dual fuel tariff. Some consumers find that it’s actually cheaper to get gas and electricity through separate suppliers.

how to Compare Energy Prices online

How else can I save money on energy?

Comparing energy prices is very important. But switching energy suppliers is by no means the only way to cut your energy costs. There are many ways in which you can drive down your energy costs by reducing your energy consumption. Sometimes this requires nothing more than diligence, other times it requires a modest investment. If you’re prepared to make a more substantial investment, you can make home improvements that will drastically reduce your energy usage.

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In the table below, we’ve suggested some energy-saving measures and now much they can potentially knock off your energy bills, no matter who supplies your gas and electricity.

Energy Saving Solution Potential Savings
Turn down your thermostat by just one degree. £75 per year.
Replace incandescent bulbs with CFL or LED bulbs. £55 for the lifetime of each bulb.
Replace your windows or doors with BFRC A++ rated alternatives. £120 per year.
Replacing your loft and wall cavity insulation. Up to £395 per year.
Replace your boiler if it’s more than 12 years old. Up to £305 per year.
Switch off TVs and other devices that are on standby overnight. £68 per year.

Which energy supplier is the best?

Ultimately, this is what it all comes down to when comparing energy prices. Which supplier is the best? Unfortunately, this is an extremely difficult question to answer. There is no single energy supplier that can objectively be described as the best. It all depends on what you’re looking for in a supplier.

Are you motivated only by price? Or are you willing to pay more for a supplier that offers superior customer service or has a greener energy fuel mix? Are you happy to manage your account online, or do you feel that phone support is essential? Your location and your energy consumption are also important factors in deciding which energy supplier is the best fit for your needs.

The good news is that there are a number of excellent all-rounders that combine industry-leading prices with good customer service and 100% renewable energy. In the table below, you’ll see a handful of great energy suppliers and why we love them:

Supplier Logo Supplier Name Description Supplier Trustpilot Score (/5)
Bulb Bulb is a 100% renewable supplier with only one variable rate to keep your bills simple and competitive. 4.6
Igloo Energy A relative newcomer to the industry, Igloo Energy is hugely popular with customers, paying interest on the credit that customers accrue. 4.5
Octopus Energy Winner of multiple “supplier of the year” awards, Octopus offers 100% renewable energy, with great customer service and value for money. 4.8
People’s Energy A crowdfunded renewable and ethical energy company that plans to share its profits with its customers. 4.2
Pure Planet As a “digital only” supplier, Pure Planet offers great value on renewable energy. 4.6
So Energy A great all-rounder with superb customer service and affordable green energy tariffs. 4.7

Who is the cheapest energy supplier?

Again, this is a difficult question to answer definitively, as there are so many variables at play. When you compare energy prices, your results may be very different from those of family members or even your next-door neighbour. Quotes may vary depending on your area, the tariff you choose and your energy consumption across one or two fuels.

However, we have compared some of the best value tariffs on the market in the table below and the estimated annual spend compared to the energy price cap. This is based on national energy unit rates and standing charges and national average consumption of 2,900 kWh of electricity and 12,000 kWh of gas per year.

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Supplier & Tariff Estimated Annual Spend Savings Against Energy Price Cap
Bulb Varifair £923.26 £118.74
Octopus Energy Octopus 12M Fixed £940.71 £101.29
Outfox The Market Fix’d 20 £904.44 £137.56
Pure Planet 100% Green Fixed 12 month £888.92 £153.08

How does switching energy suppliers work?

Find a tariff you like, get in touch with the supplier and inform them you want to switch. They will take care of the switching for you in around three weeks. If this all sounds like too much hassle, you could let a switching service do it for you. It really couldn’t be easier.

How much will I save by switching?

It depends on how much you currently pay and to whom you want to switch. If you’re on a standard variable rate and switch to a better value fixed rate deal you could save up to £300 on your annual energy bill.

How long will it take?

There is a 14 day cooling off period for you to change your mind. Most suppliers won’t start the process until this elapses but the switching process itself is fast. 17 days is the average time and it rarely takes longer than 21.

Will my supply be interrupted?

No, there will be no interruptions. The energy companies will deal with the paperwork and there will be no supply outage. Energy is provided by your local area network and neither your old nor or new supplier will inform them to disconnect your power.

How often do energy prices change?

Electricity and gas wholesale prices change constantly but the effects of this are rarely felt directly by you the consumer. Prices tend to change in line with the price cap and at different times of the year – typically highest in the summer.

When the industry regulator updates its energy cap, energy companies usually use this as a time to alter their tariff rates. This usually happens once a year.

What is a dual fuel tariff, and why should I consider switching?

Dual fuel tariffs offer both gas and electricity from the same provider. The advantages are that there is only one bill to deal with every month and you can get good deals.

How are energy prices defined?

Energy prices reflect the supply and demand of energy at a local and global level. They are also affected by the time of year. That’s why energy can be more expensive in the winter. Of course, if you’re on a fixed rate deal, your supplier will build fluctuations into your bills throughout the year.

How else can I save money on energy?

There are lots of ways you can save money on energy. These include:

  1. Turn off standby appliances
  2. Install a smart thermostat
  3. Turn down the temperature
  4. Install a new boiler or service your old one
  5. Wash clothes at a lower temperature
  6. Take showers rather than deep baths
  7. Insulate your home
  8. Use up to date appliances

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FAQ

Where do energy price comparison figures come from?

Energy price comparison figures are based on your energy consumption for the year. If you are unable to provide this information, however, price comparison services can still provide quotes based on estimates. The figures from these come from national average consumption for low, medium and high energy consumers. Figures are as follows:

  • Low- 1,800 kWh electricity, 8,000 kWh gas
  • Medium- 2,900 kWh electricity, 12,000 kWh gas
  • High- 4,300 kWh electricity, 17,000 kWh gas

Can I compare gas and electricity separately?

Yes, you can and should. While dual rate tariffs offer a discount for consumers, they aren’t necessarily always the cheapest deals on the market. This is why we include both dual and single fuel tariffs when comparing energy prices on your behalf.

What information do I need to compare energy prices?

You will need to know your existing tariff information and average monthly bill amount, as well as how many kWh you use each month. You will also need your current address.

What is the difference between fixed and variable-rate tariffs?

A variable-rate tariff rises and falls in line with the wholesale cost of energy. However, your energy company has to give you 30 days’ notice if your energy costs are going to change. A fixed-rate tariff locks your gas and electricity prices in place for a set period of time (usually 12 or 24 months). When these tariffs expire, your supplier will usually switch you to a variable-rate default tariff unless you arrange otherwise. You can leave a variable-rate tariff at any time, but some fixed-rate tariffs have an early exit fee if you attempt to switch before the contract is complete. You can, however, switch up to 49 days before your contract’s expiry date without incurring fees.

Will my gas and electricity be interrupted if I switch?

Absolutely not. The transition between suppliers will be seamless, and you will receive a final bill from your previous supplier when the new supplier takes over. In fact, if your switch takes more than 15 days, you will be entitled to £30 in credit as compensation.

Updated on 7 Oct, 2021

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UK Content Manager

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Alex

Consumer Energy Expert