Gas and electricity suppliers: how to choose the right energy firm

Shopping around for the best gas and electricity supplier is no longer about snapping up a cheap fixed deal, because none of the tariffs now on the market can beat the energy price cap.  

In the current climate, it’s customer service at energy firms that counts, along with how supportive suppliers are if you’re struggling to pay your bills and how generous they are with their energy bill hardship fund. 

Around 22 million households are on their supplier’s standard ‘default’ tariff. While this has traditionally been the most expensive tariff around, ironically it’s now likely to be the most budget-friendly as the amount suppliers can charge on standard tariffs are limited by the energy price cap. 

That said, some energy suppliers could face fines from Ofgem, after increasing customers’ direct debit payments by ‘more than is necessary, and in many cases, way in excess of the 54% price cap rise.

So how do you go about choosing the right energy supplier?

What should I look for in a good gas and electricity supplier? 

While it is tempting to choose a big household name, other factors should influence your choice of supplier.

Top of the list is finding a company that excels in customer service. Will the customer care team pick up the phone quickly? Will you be on hold for 25 minutes listening to endless music on a loop? Or will you be consigned to attempting to get issues resolved with a chatbot, which can be equally frustrating. According to research from Citizens Advice, energy providers’ customer service is now at its worst since 2017, with the average call wait time over five minutes among the best suppliers and over fifteen minutes with the worst. 

For those who want to focus on helping the planet through a ‘green’ energy tariff, you need to be confident that your new supplier offers energy from fully renewable sources, and shop around to find out which suppliers have the best green energy deals.

When it comes to how you want your bills presented, some companies go  paperless, which means bills hit your inbox rather than your doormat, though this won’t suit everyone. Many suppliers will allow for your bills to be sent through the post, though be warned there may be a charge.

You will need to work out which elements are most important to you so that you can then compare suppliers and determine where to switch.

Is it best to get gas and electricity from the same supplier? 

In most cases, prior to the current energy crisis, a dual fuel tariff was cheaper than having two separate billing companies for your gas and electricity.

This is usually because providers offer a discount when supplying both gas and electricity.  The other added bonus is that a dual fuel deal saves the hassle of dealing with two sets of suppliers and two sets of bills, since you only have to submit meter readings to one company, usually at the same time each month.

 How do I work out my energy consumption? 

To get the most accurate quote online, you’ll need to provide your household’s annual energy consumption.

You can see how much gas and electricity you use each month on your energy bill, which will include the kilowatt hours (kWh) used, how much each kWh costs, and your meter reading.

As costs vary between summer and winter months, your supplier should provide an estimated annual usage in kWh on your bills, or an annual statement if you have been with them for over a year.

Another option is to read your meters weekly – remember, usage will be lower in the summer.

It’s important to always submit your meter readings each month so that your bills are accurate.

Types of tarrif

Most suppliers offer gas and electricity with a choice of tariffs (the payment plan you sign up for). You can find your current, or previous tariff on your energy bills or by contacting your supplier. If you use a prepayment meter, you can only switch to another prepayment tariff.

 Standard variable tariff 

The standard variable tariff, or SVT, is the basic ‘default’ tariff energy suppliers will put you on if you have never switched, or your initial fixed tariff has expired. It used to be the most expensive way to pay for energy, before the current energy crisis.

If your supplier has gone bust, and Ofgem has moved you to a new supplier, you may be on a special ‘deemed’ tariff, so it’s worth asking to switch to their standard tariff.

The SVT is protected by the energy price cap. This means there’s a cap on the cost of each unit of energy that suppliers can charge. Should you want to, you can switch suppliers at any time, penalty free, while on your supplier’s default tariff.

Fixed-rate tariff 

Locking into a fixed rate deal with your energy supplier, where you pay a set amount for each kWh of energy you use over a fixed period - say one to two years ‒ is no longer likely to be your best bet, since these deals are not protected by the energy price cap.

With a fixed rate tariff, while your bills can still rise or fall depending on how much energy you use, the amount you pay for each kWh of energy is fixed.

Some suppliers may charge an exit fee if you want to terminate your contract early, which can typically be around £30. However, others, like Avro, E.ON Next, and Octopus Energy, don’t charge exit fees on their fixed-rate tariffs.

You can also switch suppliers penalty free within the last 49 days (opens in new tab) of any existing energy deal, and suppliers should remind you of this between 42 and 49 days before your fixed deal ends.

Economy 7 tariff 

This tariff charges more for electricity during peak daytime hours, but a cheaper rate for seven hours at night – for example, between midnight and 7am in winter.

It is useful if you mainly heat your home and hot water tank using electricity – perhaps you have night storage heaters or work at home during the night – but it won’t suit most households.

Around 1.7 million UK households don’t have a gas main supply, and so rely on heating oil to heat their homes and provide hot water. Prices have tripled since the start of the year. In this instance it pays to use comparison sites to find the best deal.

Green tariffs 

If you prefer your energy to be renewable, then sign up to a green tariff from companies that supply 100% of their electricity from renewable sources, such as wind, solar or hydro power.

But remember, some firms’ tariffs as are not as green as they may seem.

(MORE: Best gas and electricity deals)

 Should I switch suppliers to get the best deal? 

Once cheaper fixed deals come back on the market, it’s worth shopping around and using comparison sites.

While research by Uswitch found that people who switched energy supplier for both gas and electricity in the six months to 31 December 2020 saved an average of £216, in the current climate, you could actually pay around 40% more than the energy price cap with some fixed deals.

Locking into a fixed deal may mean paying more than the energy price cap, but it could also protect you against a further energy price cap rise in October, which is expected to rise by 32%.

Some providers are currently only offering fixed deals to existing customers, or to those who were switched across when their previous supplier went bust.

(MORE: How to switch energy suppliers)

Which gas and electricity suppliers should I consider?

A total of 26 companies supply energy to UK homes. 23 supply both gas and electricity, with a further two supplying gas only and one supplying electricity only, according to the latest figures from Ofgem (opens in new tab). This is less than half the number in the marketplace in December 2019.

While it is tempting to choose household names, such as the Big Five firms – British Gas, EDF Energy, E.ON (now incorporating npower), SSE, and Scottish Power – it may be worth broadening your search to other energy firms like Octopus Energy and Ovo Energy.

Octopus Energy topped the list of the latest Which? Recommended Providers, followed by Ovo Energy and So Energy. And in the latest Citizens Advice customer service report, M&S finished in first place, followed by EDF, Octopus Energy, Affect Energy and So Energy. However it’s worth noting that Citizens Advice say standards are down across the board, with even the top performer scoring less than four out of five stars.