How To Find The Best Energy & Gass Deal For You In 2022
We’ve warned about it for over six months, and it’s been confirmed for two. Yet now, the harsh reality hits home. The energy price cap – which governs providers’ standard tariffs – rose by a horrendous 54% on Friday 1 April, adding nearly £700/year to a typical household’s bill.
What’s more, despite the massive rise in the cap, households are still likely to be better off doing nothing, as the cheapest fixed deals are still seriously expensive – you can do a Cheap Energy Club comparison to check yourself. For help navigating this tricky market, see Martin’s video explainer below.
the past, smaller energy suppliers have been cheaper than household names, but things have changed due to the ongoing energy crisis.
All energy providers are setting their variable prices close to the level of the energy price cap, so there aren’t many differences to point out right now.
If we look back at the way things were before the 2021 energy crisis, however, we can see how the differences between larger and smaller suppliers worked.
Ofgem benchmark the prices of larger suppliers against some smaller names, as well as highlighting the cheapest average deal on the market at any given time.
In Q1 2021, the cheapest annual dual fuel tariff available cost £859 per year while several big name companies like E.ON and EDF had set their SVT rate at the maximum allowed of £1,042 – a difference of £183 per year.
Ofgem looked at 10 energy suppliers to demonstrate the difference between their average annual variable tariffs and the cheapest fixed deals a provider has available. Again, these are example figures from Q1 2021 ranging from most expensive SVT to cheapest:
|Average SVT||Cheapest SVT|
As the table demonstrates, smaller names tended to price their SVTs lower as well as offering cheaper fixes too.
Yet the collapse of Avro Energy suggests that wasn’t a sustainable model for them, and we haven’t seen aggressive pricing like this in the market as the wholesale energy crisis got worse in 2021 and into 2022.
Before the crisis, around 70% of the UK’s domestic electricity and gas supply was sourced from the big suppliers and this will have increased with big names taking on the customers of failed suppliers in 2021.
Switching had become more popular in recent years. In 2019, a record 6.4 million customers changed energy suppliers – more than a fifth of the UK’s total customers, yet switches slowed in 2020 due to the coronavirus pandemic and were then affected by the energy crisis in 2021.
Figures from Energy UK found 5.78 million households switched their electricity supply in 2021, although the most recent figures for February 2022 found less than 97,000 had switched during that month and switching figures are set to remain subdued for some time to come.
Often, people were switching mainly because the cheap energy deals from smaller companies were outstripping the offers from larger suppliers, making them an attractive choice for cash strapped consumers. Around a third of customers who switched would go from a larger firm to a small or medium supplier.