In a nutshell
If you’re on a fixed tariff, you can leave 49 days before the end of your contract without penalty. If you’re on a variable tariff, you can leave without penalty whenever you want.
When’s the last time you switched energy suppliers? If it was a while ago, you’re probably paying more than you need to.
By switching suppliers, you can avoid paying costly default tariffs and save a ton of money each year. Yet according to Ofgem, 49% of people have either never switched suppliers or have only ever switched once! Here, we’ll reveal how to switch energy suppliers and when to do it to avoid having to pay an early-exit penalty.
Why switch energy suppliers?
When you first chose your energy supplier, chances are it was the cheapest option around and you were happy with your choice. So, why bother switching?
Well, when you sign up with an energy supplier, you’ll normally get put on a contract that lasts 12, 18 or even 24 months. During this time, they’ll offer you a special, discounted rate on your energy to reel you in. Kerching!
Usually, this will be a fixed-term tariff, which means your payments will be set at a fixed cost per kilowatt-hour, kWh (that’s the unit suppliers use to measure how much gas and electricity you're using). In other words, you’ll know exactly how much you’re going to be charged for each unit of energy that you use. Simple!
However, once your contract ends, your supplier will automatically put you onto a more expensive tariff, knowing that most people either can’t be bothered to swap or don’t know how. This rate is known as their standard variable tariff (SVT) and it can go up and down without any warning. Normally, your supplier will move it roughly in line with the price they’re paying for energy from the National Grid. But technically, they can move it around whenever they fancy. Not good!
So, back to the question: ‘why swap energy suppliers?’ By switching suppliers (or moving to a new fixed plan with your current supplier) before you get put onto that dreaded SVT, you can access those lower introductory tariffs all over again and use the money you save to buy something much more exciting – a fancy meal? A weekend away? The choice is yours!
Where do penalties come into it?
Okay, so now you know why it’s so important to switch energy suppliers. But there’s just one problem! If you leave your fixed-term tariff before your contract runs out, you could be faced with early exit fees – basically, a penalty for leaving early. This could be anywhere from £10 to £60.
Don’t get us wrong, there are a few really lovely energy suppliers out there, like Octopus Energy and Bulb, that don’t do exit fees. But, sadly, most of the big energy suppliers do. So, you’ll need to time the switch just right. Which brings us onto…
When can you switch energy supplier without penalty?
If you’re on a fixed-term tariff, you can leave without having to pay a penalty up to 49 days before the end of your contract. Woohoo!
The easiest way to find out when your fixed tariff is ending is to look at your latest energy bill. Your tariff end date should be on there next to your account number and tariff name. So, find your latest bill and write that date in your diary! Then, when you’re nearing the end of your fixed plan, it’s time to start exploring your options.
If you’re on a variable tariff, on the other hand, you can switch energy suppliers whenever you want without incurring a penalty. That’s because variable tariffs don’t come with any exit fees.
This might sound great but in an ideal world, you’ll want to avoid ending up on your supplier’s variable tariff in the first place – simply because it’s so expensive! So, if you look at your energy bill and find you’re on your supplier’s SVT, you’ll want to get yourself on a lower tariff as soon as possible. Let’s look at how to go about it.
How to switch energy supplier without penalty
First, let’s just say that switching energy suppliers is REALLY easy. Honestly. Once you’ve done it, you’ll wonder why you didn’t do it earlier.
Secondly, it’s even easier if you switch to a supplier that’s signed up to the ‘Energy Switch Guarantee.’ The Energy Switch Guarantee is a pact between some of those really nice energy companies we mentioned earlier, that aims to make it as easy as possible for customers to switch suppliers.
When you switch to an energy supplier that’s signed up to it, they’ll handle the whole switching process for you and they’ll make sure that you won’t have to spend a single minute without energy while you’re switching. Bliss!
So far, 14 energy suppliers have signed up to the Energy Switch Guarantee, including some forward-thinking ones that are taking on the big, bad, greedy energy suppliers who’ve dominated the market up until now. Octopus Energy and Bulb are a couple of our favourites. Not only do they make it super easy for you to switch, but they also use 100% renewable energy and have amazing customer service. What more could you want?!
Anyway, it can take as little as 10 minutes to switch to a new energy supplier. Just follow these simple steps:
1. Find out what tariff you’re on
First things first, you’ll need to find out how much you’re paying for your energy and whether you’re on a fixed or variable tariff. This information should all be written on your energy bills, so check the next one that makes its way through your letterbox (or log into your online account if you’ve gone paperless). If you can’t find it, just get in contact with your supplier and they should be able to help.
Not sure who your supplier is? Don’t worry. You can use the online Find My Supplier tool to find out who your gas provider is, or you can find your electricity supplier by searching for your energy network operator on the Energy Networks Association.
2. Compare rates
The next bit’s easy – compare your options to find a cheaper rate (trust us, if you haven’t switched suppliers in a while, there’ll be tons of cheaper options out there!). You can:
- Use comparison sites like Compare the Market, MoneySuperMarket and Confused.com.
- Talk to your current supplier to find out whether they can give you a better rate.
- Check out the companies that have signed up to the Energy Switch Guarantee (remember, they’re companies who’ve promised to make switching even easier for you!).
Just remember: it’s not all about money. Ever been left on hold for hours trying to call your energy supplier? If so, you’ll know just how important it is to check things like customer service and consumer reviews before making your decision.
Check out our company reviews to view a few of our favourite companies for making your life easier when it comes to household bills. Ultimately, we all love a good deal but it’s not all that matters!
3. Make the switch
Picked your brand spanking new deal? Congrats! All you have to do now is sign up with your new supplier.
You may also have to let your current supplier know that you’re cancelling your contract (although if you pick a company that’s signed up to the Energy Switch Guarantee you won’t even need to do this!). And then, voila! Your new supplier will be in touch to let you know what date they’ll switch you over.
It normally takes around 17 to 21 days until the switch is complete, but don’t worry! That doesn’t mean you won’t have any energy during that time. You should be able to time things so that there’s no gap between your contracts. And if your supplier’s signed up to the Energy Switch Guarantee, they’ll make sure of that for you. Easy!
Ready to switch energy supplier?
When it comes to your gas and electricity bills, it pays to be on the ball. So, if you haven’t changed energy suppliers for a while, make sure to spend a few minutes today checking what rate you’re on. Chances are you’re paying more than you need to. And if that’s the case, it’s quick and easy to find a new rate and switch suppliers.
If we had to pick our favourite supplier, we’d probably go for Octopus Energy, so check out our review to see if it’s a good fit for you. Either way though, the main thing is just to switch to a better deal. We promise, you’ll be saving money before you know it!