Is Now A Good Time To Switch Energy Suppliers
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Yes, now is a good time to consider switching energy suppliers in the UK, especially with the recent changes in energy prices and the energy price cap. Here are some key reasons why you might want to switch: A recap of the energy market crisis October 2021 started with a substantial increase in the average […]
Yes, now is a good time to consider switching energy suppliers in the UK, especially with the recent changes in energy prices and the energy price cap. Here are some key reasons why you might want to switch:
- Energy Price Cap Reduction: The energy price cap, which protects consumers from excessively high prices on standard variable tariffs, has been reduced. As of July 2024, the cap will be £1,568, down from £1,690. This reduction means that standard variable rates are likely lower, making it an excellent time to compare fixed-rate deals, which might now be more competitive.
- Fixed-Rate Tariffs: Fixed-rate energy deals are becoming more attractive as they offer price certainty over a fixed term, which can protect you from future price increases. With energy prices being volatile, locking in a fixed rate now could provide stability and potentially save you money in the long term.
- Green Energy Options: Many suppliers offer green tariffs supporting renewable energy projects. Switching to a green energy supplier helps you reduce your carbon footprint and supports the development of renewable energy infrastructure. Providers like Octopus Energy, OVO Energy, and Good Energy offer competitive green tariffs worth considering.
- Customer Service and Incentives: Companies like Octopus Energy and OVO Energy are highly rated for customer service. Additionally, some suppliers offer incentives for switching, such as discounts or referral bonuses, which can provide additional savings.
A recap of the energy market crisis
October 2021 started with a substantial increase in the average household level from £1,138 to £1,277, with a 50% increase in the price of gas. Over the winter months, Brits were left with little support from the "Heat now, pay later" loan program.
Things went from bad to worse at the end of February 2022 when Russia invaded Ukraine, further skyrocketing the wholesale gas price. Only one month later, the Ofgem Price Cap increased by a staggering 54%, which, according to the National Energy Action estimations, left 6.5 million households in fuel poverty.
The crisis led to the collapse of a record number of energy suppliers, leaving millions of customers and businesses without a supplier. Before the market crash, you could've solved this in minutes by contacting an energy provider or scouting the internet for the next best energy deal. However, by October 2021, switching power providers became an impossibility due to the overwhelming state of the energy market, which could not accommodate any new customers.
List of power suppliers that collapsed in 2021
These collapses affected nearly four million households in the UK. However, no households faced a disruption thanks to the Supplier of Last Resort (SoLR) process established in 2003. This means that if your energy provider goes out of action, you automatically switch power suppliers.
The collapse of so many power suppliers in such a short period of time highlighted the fragility of the UK energy market. The government has since taken steps to strengthen the market, such as increasing the minimum capital requirements for energy suppliers.
A slow comeback
The energy market in the UK started to recover from the 2021 crisis in early 2023. If you recently went through any of the big service comparison platforms in the UK to switch your energy suppliers, chances are you've encountered a message saying that this service is temporarily unavailable.
The government took several steps to address the crisis, including increasing the minimum capital requirements for power suppliers and introducing the Energy Price Cap. The Energy Price Cap limits the amount energy suppliers can charge their customers for their standard tariffs.
These measures have helped to stabilise the energy market and prevent further collapses of power suppliers. However, the market is still vulnerable to shocks, such as the global energy crisis.
There are some signs that the energy market is starting to recover. For example, the number of energy suppliers offering new tariffs has increased, and the Energy Switch Guarantee is being improved. However, it will likely take some time for the switching market to return to pre-crisis levels.
Consumers can support the energy market by switching to a more competitive tariff and reducing their energy consumption by making energy-efficient home improvements.
How to switch energy supplier in 2024: Tips from TOP Energy Experts
This year offers a fantastic opportunity to take control of your energy costs and move towards savings and sustainability. With the energy market evolving, switching providers is highly recommended. It’s a great way to secure a better deal and enjoy the benefits of a market that’s on the rise. Take advantage of this chance to make a positive change for both your wallet and the environment!
1. Regularly Compare Tariffs
Energy tariffs can change frequently. Industry experts recommend comparing energy tariffs at least once a year to ensure you're getting the best deal. Use online comparison tools to find and compare offers from different suppliers easily.
2. Consider Fixed or Variable Tariffs Carefully
Experts suggest considering your energy usage and budget when choosing between fixed and variable tariffs. Fixed tariffs offer price stability, while variable tariffs may fluctuate with market conditions.
3. Check for Exit Fees
Before switching, review your current energy contract for any exit fees. These fees can offset potential savings from switching, so knowing what you might incur is essential.
4. Evaluate Customer Service
Besides price, consider the quality of customer service potential energy suppliers provide. Look for reviews and ratings to gauge the level of customer satisfaction with each company.
5. Explore Green Energy Options
In 2023, there's a growing focus on environmentally friendly energy. Experts recommend considering suppliers that offer renewable energy options to reduce your carbon footprint.
6. Understand Your Usage
Industry experts emphasize the importance of understanding your energy usage patterns. This knowledge will help you choose a tariff that suits your consumption and lifestyle.
7. Timing Matters
Keep an eye on the energy market. Experts suggest that the best time to switch may vary, but looking for deals during the off-peak season or when suppliers offer promotions can lead to significant savings.
8. Be Wary of Dual Fuel Discounts
Some suppliers offer discounts if you combine gas and electricity with them. Experts recommend calculating if these discounts genuinely save you money or if separate tariffs for gas and electricity are more cost-effective.
9. Read the Fine Print
Before committing to a new supplier, carefully read the terms and conditions, including the length of the contract and any special terms. Make sure you understand what you're signing up for.
10. Don't Be Afraid to Haggle
Expert advice often includes negotiating with your current supplier for a better deal. If you've found a better offer elsewhere, let your current supplier know; they may match or even beat the offer to retain your business.
11. Switch Energy Supplier Responsibly:
Lastly, industry experts encourage consumers to switch energy suppliers responsibly. Ensure your chosen energy provider aligns with your values and preferences, whether about green energy, customer service quality, or other ethical considerations.
Back to you
Switching energy suppliers in 2024 can be a straightforward and beneficial move, especially with the recent reductions in the energy price cap and the increasing availability of competitive green tariffs. By taking the time to compare different providers and understand your current energy usage and costs, you can find a deal that not only saves you money but also supports renewable energy initiatives. Whether you prioritise price stability with a fixed-rate tariff or wish to reduce your carbon footprint with a green energy plan, now is an excellent time to make the switch. Remember to review the terms of your current contract, consider any exit fees, and use reliable comparison tools to ensure you get the best deal possible.
