Best buy energy deals reach cheapest point in two years thanks to falling wholesale costs – could you slash your bills with one of these 10 cheapest tariffs?
- Wholesale costs have dropped, meaning cheaper tariffs
- This will be welcome news for the people working at home during lockdown
- We reveal the best energy offers currently on the market
Tumbling wholesale costs have seen home energy offers drop to their lowest prices since summer 2018, new data has revealed.
The current cheapest deal costs the typical household £764 a year with the best value tariff from the Big Six coming in at £806, according to Uswitch.
With many more people now working from home and using more energy, it is vital that people aren’t on rip-off tariffs leading to shock higher bills.
Falling wholesale costs have seen energy offers drop to their lowest prices since summer 2018
Costs are low due to wholesale costs being reduced compared to last year, as well as there being lower industrial energy use, meaning domestic prices have become cheaper.
Day-ahead wholesale electricity prices in April 2020 were also down 44 per cent on last year, falling from £43.55 per megawatt hour (MWh) to £24.18 as global demand has plummeted during lockdown.
As such, households stuck on pricey standard variable tariffs are encouraged to use online comparison tools to see if they could switch to a cheaper deal.
By doing so, they could potentially save hundreds of pounds a year on their bills.
Customers who are on fixed deals are also advised to check their tariff as hundreds of fixed offers came to an end in April and May.
This means many will automatically be moved onto SVT’s which are consistently more expensive than fixed deals.
The cheapest tariff currently available at the moment is the Fix’D 20 11.0 deal from Outfox the Market which costs just £764 and is set for 12 months.
Challenger supplier, Tonik Energy, has the second cheapest offer on their Green Super Power (1 Year) v4 fixed tariff which costs £770.98 a year.
This also comes with free boiler service, however, if customers want to leave before the end of their contract, they will have to pay a £60 fee.
|Supplier||Plan name||Tariff type||End date||Warm Home Discount?||Exit fee (£)||Average price (£)|
|Outfox the Market||Fix’D 20 11.0||fixed||12m||No||0||£764.10|
|Tonik Energy||Green Super Power (1 Year) v4 + Free Boiler Service||fixed||12m||No||£60||£770.98|
|Avro Energy||Simple and SuperFixed||fixed||12m||Yes||0||£792.85|
|Together Energy||Green Together Fixed May21||fixed||12m||No||£60||£797.73|
|Green Network Energy||GNE Spring Sunrise V4||fixed||12m||Yes||£50||£798.62|
|Igloo Energy||IGLOO PIONEER||variable||N/A||No||0||£805.06|
|British Gas||Energy and Home Services May 2021||fixed||31/05/2021||Yes||£60||£806.31|
|npower Select||Exclusive 12 Month Fix v2||fixed||12m||Yes||£60||£806.73|
|Yorkshire Energy||Green Flamborough – Fixed until 31st July 2021||fixed||31/07/2021||Yes||£60||£811.19|
|Source: Uswitch (correct as of 19 May 2020)|
The fall in prices is not limited to the lesser-known suppliers as the cheapest tariff from the Big Six is the British Gas Energy and Home Services May 2021 costing £806.31 a year.
Npower also has a deal in the top ten on its Exclusive 12 Month Fix v2 deal, costing just 42p more a year than British Gas’ deal at £806.73.
However, customers who opt for the Big Six deals will be required to have a smart meter installed which will certainly put some people off changing provider.
All the other top ten best buy deals are available with or without a smart meter.
Green Energy and Igloo Energy were the only two suppliers with variable tariffs in the best buy table costing £800.09 and £804.06 a year, respectively.
Will Owen, energy expert at Uswitch, said: ‘Life is far from easy at the moment, but one small chink of light is that energy prices are lower now than they have been for almost two years.
‘This will be particularly welcome news for any homes consuming more power than usual due to the lockdown.
‘Households currently on Standard Variable Tariffs could save up to £397 on average by moving to Green Network Energy’s cheapest deal — or up to £355 if they switched to a fixed deal from British Gas, the lowest tariff from a Big Six firm at the moment.
‘The cheapest tariff for those entitled to the Warm Home Discount is the Simple and SuperFixed deal from Avro Energy costing £793 on average.
‘We last saw a period of prices this low almost two years ago in the summer of 2018, so now is a great time to explore whether you can save some money — no one should be paying a higher rate for their energy than they need to.’
Could you cut your energy bills?
Millions of people could be needlessly overpaying for their energy as they fail to switch to providers who offer cheaper deal.
They may also be missing out on the opportunity to help the planet and fight climate change, by switching to green deals that offer electricity from renewable sources and more environmentally-friendly gas.
With our new partner, Compare the Market, you can compare energy tariffs and exclusive deals.
Why not find out if you could save hundreds of pounds a year on your energy or go green?