For years, shopping around for energy has often been presented as a simple choice:

Stay with your current supplier and potentially pay more — or switch and save.

But that isn't necessarily the right way to think about it.

Your existing supplier may offer you a competitive renewal tariff. Another supplier might have a cheaper unit rate but a higher standing charge. A new tariff might appear cheaper but come with an exit fee that matters if energy prices subsequently fall.

And sometimes the cheapest option available to you may simply be to stay where you are.

The question therefore shouldn't be:

“Should I switch supplier?”

It should be:

“Which available tariff is likely to cost me least for the energy I actually use?”

Ofgem advises consumers to choose an energy tariff based on how much energy they use and their own circumstances.

That is a subtly different question — but an important one.

Switching supplier and changing tariff are not the same thing

When your existing energy deal ends, you don't necessarily have to choose between accepting whatever happens next and moving to another supplier.

There can be a third option:

Stay with your existing supplier but move to a different tariff.

Consumers can choose both their supplier and their tariff, so a useful comparison should ideally consider three possibilities:

1. Stay on your current or default tariff.

2. Take another tariff offered by your existing supplier.

3. Switch to a tariff offered by another supplier.

The cheapest of those options won't necessarily be number three.

Start with your energy use, not the advertised saving

Suppose your existing supplier offers you a new fixed tariff.

At the same time, a comparison advert says you could save £180 a year by switching.

The £180 figure sounds compelling.

But before deciding, you need to know what has actually been compared.

The amount your household pays for energy depends heavily on how much energy you use.

A better starting point is therefore your own annual energy consumption, usually expressed as:

Electricity: kWh per year
Gas: kWh per year

Then apply exactly the same consumption to every tariff you're comparing.

That creates a like-for-like comparison.

Compare the actual tariff components

For a conventional gas and electricity tariff, the calculation is broadly:

Annual energy cost = usage × unit rate + standing charges

For electricity:

Annual electricity consumption × electricity unit rate
+ electricity standing charge × 365

Then do the equivalent calculation for gas.

Add the two together and you have an estimated annual tariff cost based on that household's consumption.

That calculation should be performed for your existing supplier's offer and competing tariffs.

This matters because tariff structures differ.

One tariff could have a lower unit rate but a higher standing charge. Another could have a higher unit rate but a lower standing charge.

Which one is cheaper can therefore depend on how much energy you use.

A simple example

Imagine a household uses:

2,500 kWh of electricity a year
9,000 kWh of gas a year

Its current supplier offers a renewal estimated to cost £1,570 a year at that consumption.

Another supplier's tariff works out at £1,525 using exactly the same consumption.

At first sight, switching saves:

£45 a year

That doesn't mean the new tariff should automatically be rejected — but £45 is now the real decision we're considering.

The question becomes:

Is switching supplier worth £45 to this household?

For some people, yes.

For others, perhaps not.

That is much more useful than simply being told that one tariff is “cheaper”.

Exit fees can change the decision

Fixed tariffs can include exit fees if you leave before the contract ends.

Suppose the tariff saving £45 has a £75 exit fee per fuel.

If energy prices subsequently fall and you want to move to another deal, leaving could potentially cost £150 for a dual-fuel customer, depending on the tariff terms.

That doesn't make the tariff bad.

It means the £45 annual saving shouldn't be viewed in isolation.

Price matters enormously. It just isn't the only thing that can matter.

What if your current supplier matches the market?

Now consider a different situation.

Your existing supplier offers a renewal costing approximately:

£1,540 a year

The cheapest suitable competing tariff costs:

£1,532 a year

The difference is just:

£8 a year

Technically, the competing tariff is cheaper.

But describing this simply as a reason to switch misses useful information.

A fair comparison should show the customer the difference and allow them to decide whether changing supplier for an estimated £8 annual saving is worthwhile.

And if the existing supplier is actually cheapest?

Then the sensible result may simply be:

Stay.

Staying shouldn't be treated as a failed comparison

This is where the way energy tariffs are presented matters.

If the purpose of a comparison is genuinely to help someone find the most suitable deal, staying with their existing supplier has to be a legitimate outcome.

Otherwise the comparison starts with a built-in assumption:

Switching = success

But the customer's objective isn't necessarily to switch.

Their objective is to make a good decision about what they'll pay for energy.

Sometimes switching will produce a meaningful saving.

Sometimes another tariff from the same supplier will be better.

Sometimes the difference will be too small to matter to the customer.

And sometimes staying will simply be the cheapest option.

A useful comparison should be capable of showing all four outcomes.

Don't confuse your Direct Debit with the tariff cost

Another common mistake is comparing tariffs using the amount leaving your bank account each month.

Your Direct Debit is a payment mechanism. It isn't necessarily the same as the cost of the energy you're currently using.

Depending on your consumption and account balance, you could be building up credit or using existing credit.

So comparing:

“I currently pay £130 a month”

with:

“This new tariff is estimated at £120 a month”

doesn't necessarily establish a £10 monthly saving.

A stronger comparison uses the tariff rates and your annual energy consumption to estimate what each option would cost on the same basis.

The cheapest tariff today may not remain the cheapest

There is another complication.

Choosing a fixed tariff can provide certainty over its unit rates for the fixed period, whereas the energy price cap applying to default tariffs is updated every three months.

That means comparing a 12-month fixed tariff against today's price-capped rates isn't the same as knowing what the price cap will be for the entire next 12 months.

Future capped rates could rise or fall.

This is why a tariff comparison should distinguish between:

What is known today

and

What depends on future energy prices.

A fixed tariff may provide certainty even when it isn't the absolute cheapest option based on today's rates.

That certainty itself may have value to some households.

What should you compare before deciding?

Before staying or switching, look at:

• Your annual electricity consumption

• Your annual gas consumption

• Electricity and gas unit rates

• Electricity and gas standing charges

• Whether the tariff is fixed or variable

• The length of any fixed period

• Exit fees

• Any relevant discounts or tariff conditions

• The estimated annual cost using the same consumption for every option

You can then compare the difference in pounds rather than relying on a headline claim.

So, is it cheaper to stay or switch?

There isn't one answer that applies to every household.

Switching supplier could save you money.

But that doesn't mean switching is automatically cheaper.

The answer depends on your consumption, the tariff offered by your current supplier and the alternatives actually available to you.

That's why the comparison should come before the decision to switch.

At Likewise Compare, that's the principle we're building around.

Use the information from your energy bill or renewal offer to compare what the available options could actually cost you.

If another supplier is genuinely cheaper, the comparison should show it.

If your current supplier offers the better deal, it should show that too.

The objective isn't to make you switch. It's to help you make a fair comparison.

Want a clearer way to compare your energy renewal?

Likewise Compare is being built to compare your current or renewal tariff with available alternatives using your own energy usage — including when staying with your existing supplier is the better option.

Join the waitlist