When is the best time to switch energy provider?
By Marc Shoffman | Monday, October 24th 2022
You don’t have to be left out in the cold and accept rocketing gas and electricity bills. Put some socks on and get voting with your feet!
The thought of switching energy provider may be an unappealing prospect for most of us, especially when it seems you have to pick your moment as well as your provider and your tariff. It's enough to put anyone off. But energy switching doesn't need to be stressful, and there are a handful of key times when you will always get a better deal than your current one. We've outlined them here.
When you can save a lot of money
Energy prices change frequently, based on factors such as economic sentiment, the price of oil and coal, world events or just when a new provider releases a market-leading new deal. New or smaller entrants will often release attractive deals to help build their market share, while competition should also make others bring their prices down.
Whether you are on a fixed or variable rate, it is worth keeping an eye on what deals are out there so you aren’t paying over the odds for your energy. This also means looking beyond the large suppliers. Everyone has heard of British Gas, EDF, E.ON, OVO, Octopus and Scottish Power. They are the ones with the big marketing budgets that can afford to run mass marketing campaigns to grab your attention.
But that doesn’t necessarily mean they offer the most competitive deals. In fact, smaller players often make up the best buy tables. There are dozens of active suppliers in the energy market. Don’t just limit yourself to a handful. There is also no reason why you can’t check how much the others would charge to provide your energy compared with the one you are currently with.
When your supplier hikes its prices
Energy suppliers can announce price increases at any time. Usually this will be due to the price of energy on the wholesale market or the time of year, but some suppliers will just follow if they see their competitors hiking rates. If you are on a fixed rate tariff this won’t hit you at first, but those on variable rates will see their bills increase as they are typically linked to the wholesale cost of energy.
You could get ahead of your supplier by opting for a fixed tariff before prices rise. This locks in the rate at which your energy bill is calculated. You need to be clever about this though and keep an eye on when others raise their prices and consider if yours will follow suit.
If your supplier does hike prices and you are on a variable rate, they must provide you with 30 days’ notice and allow you to switch without any exit fees during that period. They must also complete this switch no later than 20 days after the increase was due to begin.
When you haven't switched in a long time
If you have been with your energy provider for more than a year or so, it is well worth looking around to see if you can save money, especially if you have come to the end of a deal. Suppliers tend to reel you in with tempting offers on fixed and variable rates, typically over a 12, 18 or 24-month period.
Be careful with standard variable tariffs (SVTs), as in normal market conditions they can turn out to be more expensive than other options. Once this deal period is over, the provider is relying on the fact that most customers won’t bother looking to switch again and will move you onto its standard variable tariff (SVT). This is the most expensive tariff, and there are no perks or incentives included as the energy supplier already hasyou as a customer. Many households forget to switch at the end of a deal, ignore that their offer has expired or think it is too difficult to switch, and just carry on paying the more expensive rate.
There is no reason for you to remain on an SVT, and as your supplier probably isn’t giving you any perks for staying, it is most probably time to switch.
Just before winter
Energy suppliers can be pretty sneaky. Often, in normal circumstances, they will hike prices just before winter. This is because they know you will use more energy in the colder months to heat your homes so they can rake in more from it through your gas and electricity bill. Suppliers would also argue that it costs more to purchase and provide energy at this time of year as demand is higher.
Instead of waiting until winter, aim to switch energy in the summer months when prices tend to be lower. This is also a good way of getting money back from your current supplier. When you set up your current deal you would have provided details of how much energy you use annually, this would then have been worked out into a monthly fee. But over the year you would usually use more energy in the colder months and less when it is warmer. So technically you underpay in the winter and overpay in the summer and it all balances out over the seasons.
This means if you make the switch in the summer your account is more likely to have been in credit due to you using less energy in the warmer months. In contrast, if you switch in the colder months you are more likely to owe your old supplier money as you would have used more energy than originally forecast.
When your current deal expires
Don’t wait for your current deal to end to start shopping around. Start lining up a new supplier or cheaper tariff with the same provider before your current deal expires so you don’t get shifted onto the more expensive SVT. Under Ofgem regulations, suppliers must inform you between at least 42 and 49 days before the end of your tariff that your deal is coming to an end. They should also provide an end date.
Once you have this notice it is then time to start shopping around for another supplier. There won’t be any exit fees to pay if you move during this period, known as the "switching window". The earlier you switch once you have received notice of the end of the deal, the quicker you can start saving money.
Frequently asked questions
Can my supplier stop me from switching?
Your supplier can’t stop you from switching unless you are in debt for more than 28 days. If you have been in debt to them for less than 28 days then the money will be added to your final bill, but if it has been longer then you will need to pay this off before the switch can be granted.
If they are still stopping your switch, you can complain to them and if you are unhappy with the outcome or there is no response after eight weeks you can then go to the Energy Ombudsman with your issue.
How long will it take to switch?
Once you have decided to make the switch you will need to provide both your old and new supplier with a meter reading. This will help create your old supplier’s final bill and the first for your new one.
Your actual move should be quicker than the notice period. Ofgem encourages suppliers to complete moves within 17 days – this allows for a 14-day cooling-off period to change your mind and three days to finish off the transfer. Most big suppliers manage this but smaller ones may take closer to 20 days.
How much will it cost?
The process of actually switching energy provider is free as long as you are out of contract. Usually even if you need a new meter, the supplier will pay for it as well. The only time you may be charged is if you exit a deal early. Many providers charge exit fees. You would need to factor this cost in to see if you will still be saving money by moving or if it is better to wait until your contract term expires.
Cost is an important factor when switching but also consider the company you are moving onto. Is it easy to send meter readings? Another important consideration is customer service, is it worth getting a cheaper deal if there is poor customer support when issues emerge? You can view company complaint data on the Ofgem website which should give you an idea of how well a supplier performs and the types of problems that may emerge as well as how easily they are rectified.