How to compare energy tariffs and switch to save money in the UK

Photo by Sarah Agnew on Unsplash

Energy bills landed hard over the past few years, and even though prices have settled somewhat, most people still open their statement with a wince. If you haven’t looked at your tariff in a while, there’s a decent chance you’re not on the best deal available to you — not because you’ve done anything wrong, but because the energy market changed shape and most of us didn’t get the memo.

For a long time, switching supplier was pointless. The energy price cap — a limit set by the regulator Ofgem on what suppliers can charge per unit of gas and electricity — meant most tariffs cost roughly the same, so there was nothing to switch for. That’s no longer true. Fixed-rate tariffs below the price cap have returned to the market, and the gap between a good deal and a lazy one can run into hundreds of pounds a year.

This article walks through what the price cap actually controls, how to read a tariff properly, when switching is worth it, and the exact steps to do it without falling for a worse deal dressed up as a better one.

What the energy price cap actually does (and doesn’t)

The price cap is the single most misunderstood thing in UK energy. It does not cap your bill. It caps the price per unit of energy and the standing charge (the daily fee you pay just to be connected, regardless of usage) that suppliers on a standard variable tariff can charge. If you use more energy, you pay more — the cap just stops suppliers overcharging you per unit.

Ofgem reviews and updates the cap every three months. Most people on a standard variable tariff — meaning they’ve never actively chosen a fixed deal — move with the cap automatically. If you’re on a fixed tariff, the cap doesn’t directly affect your price; you’re locked into whatever rate you signed up for, for better or worse.

The key misconception: a lot of people think “I’m on the price cap, so I’m protected, there’s nothing to compare.” The price cap is a ceiling, not a bargain. Fixed tariffs priced below it exist, and if one’s available to you, staying on the cap by default is leaving money on the table.

Fixed vs variable: what you’re actually choosing between

Neither is automatically better. A fixed tariff is only worth it if the rate is genuinely lower than the current cap and you’re comfortable being locked in. If wholesale energy prices look likely to fall, variable can work out cheaper. Nobody can predict this reliably — not comparison sites, not suppliers, not forecasters with impressive job titles. The honest approach is to compare what’s actually in front of you now, not try to guess the market.

How to actually compare tariffs properly

Don’t just look at the headline “estimated annual cost” figure — it’s based on an assumed average household usage (called “typical domestic consumption values,” if you ever see that term) which may not match your actual usage at all. A household with an electric car or an all-electric heating system will blow straight past that estimate.

What to check instead:

1. Unit rate (pence per kWh for gas and electricity) — this is what you’re charged for the energy you actually use.
2. Standing charge (pence per day) — charged whether you use any energy or not. This varies more between suppliers than people expect, and if you have a second home or low usage, it matters more than the unit rate.
3. Length of the deal — is it fixed for 12 months, 24 months, or variable?
4. Exit fees — can you leave early without penalty if a better deal appears?
5. Payment method discount — direct debit is almost always cheaper than paying on receipt of bill, and prepayment meter customers often pay more per unit than direct debit customers for the same usage.

Pull your last 12 months of actual usage (in kWh, not pounds) from your online account or a past bill, and use that — not the generic estimate — when comparing deals through a comparison site. It takes five extra minutes and gives you a genuinely accurate comparison rather than a rough guess.

Using comparison sites without getting stung

Ofgem accredits a number of comparison sites under its Confidence Code scheme, which means they’re required to show all available deals (including ones they don’t earn commission on) rather than just the ones that pay them best. Using an accredited site is worth the extra minute of checking — you can confirm accreditation on the Ofgem website.

A few practical things to watch for:
– Some “deals” shown are actually your current supplier’s own tariff dressed up slightly differently. Read the small print before assuming it’s a genuine switch.
– Cashback and voucher incentives can make a mediocre tariff look appealing. Work out the actual annual cost first, then treat any cashback as a bonus — not the reason to choose it.
– If you’re in credit with your current supplier when you switch, that credit should be refunded to you, not lost. Confirm this before switching if you’re unsure.

When switching isn’t worth the hassle

Switching isn’t always the right move, and it’s fine to say so:

• If you’re already on a fixed deal with exit fees, run the numbers — sometimes the saving from switching is smaller than the fee you’d pay to leave.
• If the difference between deals is only a few pounds a year, it may not be worth the admin, even though switching itself is usually straightforward.
• If you’re in energy debt with your current supplier, you typically can’t switch until it’s resolved — speak to your supplier about a repayment plan first, or contact Citizens Advice if you’re struggling, as they can help you understand your options and your rights.

How to actually switch, step by step

1. Find your current usage in kWh from a recent bill or your online account.
2. Use an Ofgem-accredited comparison site, entering actual usage rather than the default estimate.
3. Compare at least two or three deals on unit rate, standing charge, contract length, and exit fees — not just the headline total.
4. Once you’ve picked one, the new supplier handles the switch for you — you don’t need to contact your old supplier.
5. Submit a final meter reading to your old supplier on the switch date (smart meters usually do this automatically).
6. Your supply is never interrupted during a switch — this is a common fear, but switching supplier doesn’t mean turning your gas or electricity off and on again.
7. There’s typically a short cooling-off period after signing up where you can cancel without penalty if you change your mind.

A note on smart meters and prepayment

If you have a smart meter, your usage data is sent automatically, which makes switching and comparing far more accurate — use it. If you’re on a prepayment meter, your options are more limited (not every supplier or deal is available to prepayment customers), but it’s still worth comparing periodically, as this segment of the market has historically carried higher per-unit costs for the same usage as direct debit customers.

The bottom line

• Pull your actual annual usage in kWh from your last bill or online account before comparing anything — the generic “average household” estimate most sites show by default is often wildly off for your actual home.
• Use an Ofgem-accredited comparison site and check unit rates and standing charges separately, not just the total estimated cost.
• Being on the price cap isn’t the same as being on a good deal — it’s a ceiling, not a bargain, and fixed tariffs below it do exist.
• If you’re considering a fixed tariff, check for exit fees and be honest with yourself about whether 12–24 months of price certainty is worth losing the flexibility to switch again if a better deal appears.
• If you’re in debt with your current supplier or struggling to pay, speak to them about a repayment plan or contact Citizens Advice before you try to switch — debt usually needs resolving first.

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