At uSwitch, we like to point out that there is no overall best energy plan. Some people want tariffs which rely on green methods to produce energy and others want long-term fixed plans which mean they can stop worrying about prices for a while.
In this post, we’ve broken down some of the different tariff options available on the market right now.
The three cheapest gas and electricity plans
At present, the cheapest energy plan on the market is Spark Energy’s Direct Debit Advance 3. Costing the average consumer £1,025 per year, Spark Energy’s plan is £11 a year cheaper than the next cheapest deal; however, it does not allow consumers to fix energy rates, and requires advance payment.
First Utility’s iSave Fixed v14 July 2015 is the next cheapest plan available. The latter costs £1,037 every year and will freeze your rates until 31 July 2015. It does, however, carry a £30 per fuel cancellation fee.
In addition to the above, customers looking for a short term fixed price deal can turn to independent energy supplier Ovo. Ovo’s Cheaper Energy Fixed tariff costs an average of £1,042 per year and sources 15% of its energy from renewable sources. It does, however, have a £30 per fuel cancellation fee.
Short- and medium-term fixed with no early exit fees
Those happy to check the market and switch regularly are usually better off with a cheap deal with no cancellation fees. This means you can switch to a better tariff should it come along and make sure you’re never overpaying for energy.
In this context, the Co-operative Energy’s Fixed to 31 July 2015 costs £1,077 per year and has no cancellation fees.
The cheapest plan with no cancellation fees from one of the big six energy companies is EDF’s Blue+Price Promise April 2015 tariff, which costs £1,084 per year.
Long-term fixed price plans
Typically, the longer the fixed price plan, the higher the premium you will pay to keep your energy rates locked. However, if you don’t want to have to worry about switching your energy supplier for a long time, then the following deals might just be for you.
The longest fixed rate tariff available now is Sainsbury’s Energy’s Energy Fixed Price March 2018. Costing the average home £1,316 every 12 months, the plan carries a £50 per fuel cancellation fee.
Hot on its heels, is npower’s Price Protector December 2017. Although it is three months shorter than the longest plan, npower’s offering is about £100 per year less expensive and does not carry any cancellation.
Still not sure which plan is best for you? Ask us a question on Twitter or in the comments section below.
What about government cuts to green levies?
Following the winter price rises, the government found itself under considerable pressure to find a way to reduce energy bills. As a result, green levies, which are sourced from consumer energy bills, were cut. This will result in most consumers getting about £50 cut from their annual energy bill.
Although very welcome, this price drop will not be applied across the board and does not wipe out winter price rises. The average consumer will still be charged about £53 more for gas and electricity in 2014.