- Compare tariffs and switch suppliers
- Save on phone bills
- Take your seat at the energy poker table
- Why home energy will stay expensive and what to do about it

If you've ever wondered how energy switching sites work and if you're really getting the best deal by using them, then here are some answers.

The home energy market

The home energy market can be bewildering. There are over 11,000 energy tariffs and dozens of energy suppliers out there. How you pay, whether you get your statements in the post or over the internet and of course how much you use all determine the size of your energy bills.

If you pay by direct debit you pay less. If you have a prepayment meter you pay more. If you take your gas and electricity from the same company you get a discount. Some suppliers pay discounts annually, some pay quarterly. Some are green and some are brown, and some are just expensive.

Big differences in cost

Even if you pay by direct debit and take gas and electricity from the same big name supplier you can fork out way more than you need to. Changing your supplier will not get you better electricity – or warmer gas. But it may be cheaper. Much cheaper. And that’s where the comparison sites come in.

Simplifying one of the most complicated markets in the UK is a growing business. The idea is to list all available tariffs and rates according to price so you the consumer can easily choose the cheapest.

Check for the best deal on gas and electricity

How they work

How they work is simple enough. You tell a comparison service who your suppliers are, how much gas and electricity you use, where you live and how you pay your bill. The comparison service then runs this information against all currently available tariffs in your region and gives you a table of results based on price. You’ll be told how much you could save in a year, what the annual cost will be for your gas and electricity and if you want to switch, you can usually do so right there and then.

Energy comparison sites are essentially brokers. They earn commissions from suppliers for referring new customers. These commissions in turn make it possible for the sites to keep providing up-to-date information on all deals available.

Why energy companies use comparison sites

Energy companies know that most of their new customers come from comparison services and they play into it. If a big supplier is on a drive for new customers, it will “launch” a new tariff with new rates and target the top of the comparison charts. If they are number one, they will get the largest share of new customers. When they have as many as they want, they will “withdraw” the tariff and “launch” another one.

This kind of launching and re-launching of tariffs can be seen in their names. You can now sign up to E.ON Energy Online Extra Saver 12 or npower Sign Online 14. You may have already signed up to Click Energy 6 from British Gas. The suppliers skilfully nudge one another off the top spot in a game of one-upmanship that is determined by wholesale prices, market forces and of course the desire for new customers.

This is good news for consumers and the key is to take advantage of suppliers’ cheapest offerings. Right now for an average customer living in London, the difference between npower’s standard rate and their cheapest tariff is nearly £150. And if you’re an npower customer, you can switch your npower tariff to their cheapest rate using a comparison service. This is because npower knows that if you’re on a switching site, you’re looking for a better deal. And they’ll give you one to keep you as a customer, so shopping around is essential.

Special deals

A common misconception is that suppliers offer special rates to particular comparison sites. They don’t. The deal you see on one is the same deal on another. You can test this by entering the same information on different services and you should come out with the same results.

One thing is true though. Some suppliers don’t have relationships with certain comparison services. Some of the best known comparison services are unable to switch customers to some of the best deals. If the best deal is listed on the comparison service you’re using and you’re unable to switch because it’s “unavailable”, use another service where you can switch to that supplier!

Check for the best deal on gas and electricity

Can you trust comparison sites to be accurate and impartial?

The energy regulator Ofgem recommends the use of comparison services to find the best deals and watchdog Consumer Focus manages the code that regulates most comparison sites. The code has very strict rules on how results are listed and comparison services are audited regularly.

Although comparison sites want you to switch because they’ll earn a commission, they still want you to get the best deal in an open and clear way. If you use them once and save money, the hope is that you’ll trust them and use them again. It’s in nobody’s interest to provide misleading results.

Who can save money?

According to Ofgem, half of UK households have never switched. These households will usually save the most. But because deals are always changing and prices fluctuate, there are always new deals coming on the market. Checking your tariff every six months to a year is a good way to stay ahead of the game and make sure you’re on the best deal.

Is one comparison service better than another?

All comparison sites would like to think so! But the truth is that most of them list savings and prices in an accurate and easy to understand way. In addition to regulation, they test each others’ sites regularly and if any discrepancies are found, they are reported to the watchdog.

As a consumer you need choice and ease of use. It is true that some comparison services are able to switch you to more suppliers than others. This is what makes a better comparison service. Accurate, impartial results and easy switching to the biggest choice of suppliers and the best deals.

Check for the best deal on gas and electricity

Simon Moynihan is the Consumer Insight Manager for Xelector. Xelector runs the AOL Energy Comparison Service and is accredited to the Consumer Focus Confidence Code under the name Unravelit.com. You can switch to all major suppliers using the AOL Energy Comparison Service which is available on this site.