Cut the cost of gas and electricity

Tuesday, 09 November 2010 12:00

by Ben Salisbury

The current state of the energy market

British Gas and Scottish & Southern Energy (SSE) have just announced they are raising gas and electricity prices, so it is time to consider switching.

It is highly likely that other energy providers, apart from EDF, who have said they will not raise prices this winter, will follow suit in the next few months. Remember it takes up to two months to switch, so you need to take action now if you want to keep your fuel costs as low as possible this winter.

Besides lower prices, the benefits of switching include cashback and bonus deals that are available to new customers.

The Big Six

The big six energy companies dominate the market but do not always provide the best deal. Use a comparison site to find the best deal. Remember that the gas, pipes and connections are all the same, no matter which supplier you choose. Just because you have heard of the bigger companies through TV advertising or enticing promotions, it does not mean that the service or cost is better.

However, the big six suppliers do dominate the market, so who are they and what do they have to offer?

British Gas

British Gas is the leading energy provider in the UK, supplying over 11 million homes with gas and more than six million homes with electricity. The company says it is committed to providing renewable, sustainable energy and also claims its electricity has the lowest CO2 emissions of all the major UK energy suppliers.


npower supplies electricity and gas to nearly seven million customers and also generates its own electricity. As well as operating and managing low-cost coal, oil and gas-fired power stations, the company generates renewable energy through hydro and wind power.

EDF Energy

EDF Energy is the largest supplier of electricity to London, the South-east and South-west of England. The company owns and operates an energy infrastructure which distributes power to a quarter of the population.


ScottishPower is one of the longest-running UK energy groups, serving over five million gas and electricity customers in the UK and employing around 24,000 staff worldwide.


E.ON provides gas and electricity to around nine million homes in the UK, and is the world’s largest investor-owned energy company. The company also owns and operates power stations and runs the East Midlands electricity distribution network.

Scottish & Southern Energy

This company is made up of Swalec, Scottish Hydro Electric and Southern Electric. It supplies gas and electricity to over eight million UK customers, and is the second largest supplier of energy in the UK.

Best alternatives to the main suppliers

The Utility Warehouse provides energy to over 300,000 homes and small businesses throughout the UK. You can also link this to your broadband, telephone and mobile contracts to get even bigger savings. You won’t see this company advertised on TV, but it is currently the best alternative to the big six.

Find out more about what they offer here.

Why it could be time to switch

If you’re on a standard tariff, or anything other than a cheap online deal you should compare suppliers and switch. The difference between standard and online tariffs is growing. You can usually save between £200-£300 by having an online tariff.

If you move to an online tariff, there’s still a chance the price will go up. However, because they’re so much cheaper than standard tariffs, you’re still almost certain to save compared to what you would have paid otherwise.

As stated before, three of the big energy companies have removed their low tariffs for winter and the likelihood is that the others will do so in the next few weeks.

Switching tariffs is not as big a chore as you may think. The only aspects that change are the prices and possibly the level of customer service. The new supplier performs the switch.

Use the comparison site to find the best deal on utility suppliers.

Winter energy scaremongering

The energy companies tend to increase their prices in time for higher usage during the winter. They use the argument that wholesale prices have increased – but does this always happen at this time of year? Or are they perhaps using this as an excuse to make bigger profits?

It is true that wholesale gas prices are rising – by more than 50 per cent since December 2009 – but the energy suppliers don’t change their tariffs in the summer to last through the winter. They make the changes when customers use the most energy.

So, with this in mind, how can you decide on the best type of tariff for you, and what are the best deals on the market now?

Variable or fixed

There are two main options. The one you choose will depend partly on your attitude to risk and whether you like the security of knowing exactly what you will pay each month.

Variable-price tariffs

Variable-price tariffs are often cheaper, but you are vulnerable to price rises if the wholesale cost goes up. Variable price tariffs give you the flexibility to switch to a new deal at any time.

Fixed tariffs

Fixed tariffs tie you into a set period during which you have to stay with the same supplier at a set rate. If you decide to cancel you will have to pay a cancellation charge.

The best switching cashback and bonus deals

The best way to find the cheapest deal is to use a comparison site, like the one here on

There are a number of tempting offers to help make your mind up about switching energy suppliers. The best current deals include using Energyhelpline, which pays £15 cashback per switch whether you’re changing to separate gas and electricity or dual-fuel tariffs.

Moneysupermarket is offering £30 cashback and uSwitch offers 12 bottles of wine if you switch now. EDF is offering £100 of credit until the end of November. You still need to check that you are signing up for a good tariff that will save you money over the lifetime of the contract. It is a false economy to grab the best deals but still pay high fuel costs.

Comparison results (compared to a medium usage dual-fuel tariff with British Gas in East Sussex)

Supplier Annual saving (est) Annual bill (est) Tariff/Product Payment Method Service Rating

First utility £290.17 £871.68 iSave Dual Fuel v5 Monthly Direct Debit 3 stars

E.ON £221.42 £940.43 SaveOnline v4 Monthly Direct Debit 5 stars

Npower £218.64 £943.20 Sign Online 20 Monthly Direct Debit 3 stars

Scottish Power £210.44 £951.41 Online Energy Saver 11 Monthly Direct Debit 4 stars

EDF Energy* £185.92 £975.93 Online S@ver v7 Monthly Direct Debit 4 stars

Sainsbury’s** £185.92 £975.93 Online S@ver v7 Monthly Direct Debit 4 stars

*Limited Offer – £100 Welcome Bonus
**Limited Offer – £50 Welcome Bonus

Use the comparison site to find the best deal on utility suppliers.

Energy saving tips

Don’t assume dual fuel is always cheapest. It should be cheaper and often is, but not always. When comparing, check the cost of the cheapest dual-fuel supplier with separate gas and electricity tariffs.

Use less energy. This is the best advice and will help you save money whoever your supplier is. Turn off lights when you are not using them. Using energy-saving light-bulbs and not leaving electrical goods on standby are all ways to keep your energy costs down.

Switching to monthly direct debit will save you on average five to ten per cent.

Switching to your supplier’s internet tariff will usually save you up to ten per cent on the standard tariff, and all it really means is that your bills are emailed, instead of posted, to you.

Do your own meter reading. Don’t rely on your energy provider’s estimate as these are often inaccurate. If they under-bill you, you could face a big payment in the future and if they over-bill you, they have your money which you could put to better use.

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