To switch or not to switch energy supplier – that is the question we’ll be answering today
For the past few years, there haven’t been any energy deals to switch to. All energy companies have been charging the maximum allowed under Ofgem’s energy price cap, unless you were lucky enough to fix before the energy crisis hit.
Some experts think 2024 will see the return of cheaper energy deals, so what do you need to bear in mind if you’re considering switching energy supplier?
How the price cap is likely to change over the next year
The price cap changes every three months. So, when you’re deciding whether to switch to a fixed deal (either with your current provider or a new one), you need to consider how the price cap’s likely to change over the next year.
A fix that saves you money in the short term could end up costing you in the long run if energy prices drop.
So, here’s what energy experts are predicting:
Price cap prediction
1 Apr - 30 Jun
Down 14% to £1,660 a year
1 Jul – 30 Sep
Down 4% to £1,590 a year
1 Oct – 31 Dec
Up 3% to £1,640 a year
The price cap predictions are what an average dual-fuel household paying by direct debit can expect to pay. The predictions were made at the end of 2003 by the experts at Cornwall Insight.
Like the weather forecast, the further into the future you go, the less reliable these predictions become. So, the figure for April to June is a strong prediction, the one for October to December much less so.
What’s the customer service like?
If you spot a tempting deal with a different supplier, it might be worth taking into account reviews about that company’s customer service before making the switch.
Every year, Which? survey thousands of energy customers and carry out behind-the-scenes investigations to reveal the best and worst energy suppliers.
This year’s hottest companies awarded the Which? recommended provider title were:
- Octopus Energy
- E (Gas & Electricity)
They were praised for:
- customer service
- complaints handling
- hitting smart meter targets
- supporting vulnerable customers
In contract, the companies that left Which? cold were:
- British Gas
- So Energy
Before switching, you need to decide whether the money you’ll save outweighs the potential stress caused by poor customer service.
Which deals may be worth a punt?
Based on the predictions of Cornwall Insight, if you can fix your prices at about 10% less than the current price cap of £1,928 a year, you might end up saving some money. Remember, this isn't an exact science though. There are lots of factors that influence energy costs, so price cap predictions aren't foolproof.
One specific deal that may be worth considering though is the E.on Next Pledge tariff. This one moves with the price cap, staying 3% below it at all times. In terms of cold, hard cash, this is likely to result in a saving of around £50 a year. If you were planning to stay on the energy price cap, this deal should give you cause to rethink. With this tracker rate, you’re guaranteed to pay less than the price cap.
But, before you decide it's a no-brainer, E.on Next was another company that scored poorly in the Which? customer survey.
According to the consumer champion, there was little to separate it from the worst performers. So, make sure you factor that into your decision. How much is poor customer service likely to wind you up?
Disappointed you can’t bag an existing-customer-only deal with another supplier
Some of the best fixed deals around at the moment are only for existing customers. That doesn’t necessarily mean you can’t get in on the action though if you spot another supplier is offering a tempting tariff. Money Saving Expert advises you to simply switch to the company’s standard tariff first and then switch to the deal you were really sweet on.
The only thing you need to bear in mind here is, the deal could be pulled before your switch is complete. As switching only takes five days, it’s unlikely, but it’s possible. Don’t say you weren’t warned!
A qualified journalist for over 15 years with a background in financial services. Rebecca is Money Wellness’s consumer champion, helping you improve your financial wellbeing by providing information on everything from income maximisation to budgeting and saving tips.
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