Should you use an automatic energy switching service?

As Money Saving Expert takes on companies such as Look After My Bills and WeFlip, can you take the effort out of energy switching?

You can save hundreds of pounds every year by switching your energy provider. You already know this though, right? So why am I telling you? Well, people still don’t switch. 

Ok, some people switch. Almost half a million households changed supplier in August 2020. But a huge proportion of people don’t bother! Of course some of those could be fixing to new cheap(ish) deals with their current company, but the vast bulk of people could have moved and saved money.

And when talking to people about this, the big excuse seems to be that it’s too much hassle. Now, I’d argue that it’s not (and I’ll share why further down the article), but if you’re convinced you won’t be able to deal with switching your energy then auto-switching services could be the solution.

And now that Martin Lewis and Money Saving Expert have launched their own version, it could mean more of us give the a go. Here’s what you need to know.

What is an auto-switching energy service?

With automatic energy switching companies, you sign up with your details including your current provider. The service will then constantly track the price you pay against those offered by other companies. If it can save you money it will switch for you.

Some do this on a continuing basis whenever you can save, others switch you once the fix ends. In all likelihood, you’ll be switched once a year to avoid exit penalties that are usually levied if you leave more than seven weeks before a contract ends.

If you agree to the switch you don’t need to do anything. You’ll get notification of the move and should have the choice to say yes or no. Then everything will happen behind the scenes, hopefully seamlessly. It should take around two to four weeks for the switch to happen.

The pros of auto-switching your energy

It’s easy

Very simply, it’s easy. You can just let the service you choose do its thing in the background.

You only have to do it once

If you’re someone who just isn’t going to take the time each year to work it out on your own then you can be assured you will be paying less money for your bills.

It’ll keep switching for you

I like that the services will keep looking for a saving for you – even before your fix ends – and keep doing it year after year.

The cons of auto-switching your energy

Though these services sound like a no-brainer, there are a few reasons why I’ve not signed up for one…yet. These aren’t reasons to avoid them, but they are worth considering.

You probably won’t save as much as doing it yourself

For a start, some of the services charge you an annual fee – essentially a cut of your predicted savings. This can be as high as £30. Money you could have yourself if you do it yourself.

The rest of the switching services make their money by taking a cut from the energy company. That means they are free to use but they’ll only work with companies that’ll pay them. So they could exclude others which might be cheaper. 

Plus not all tariffs and savings are available with these services – though that’s the same with many comparison sites. If you are after, say, Green energy, or claim a Warm Home discount then you might not be able to use all the services. And the service you’re auto-switched too might have poor customer service. 

Savings are also based on a predicted 12-month use. This is an issue I have with all comparison sites. Let’s say you are six months into a 12-month fix. Any savings for the next 12 months will be based on what you are paying on your fixed deal for the next six months, and then what you’re predicted to pay over the final six months. This is likely to be a very expensive standard variable rate. 

Finally, if you switch via comparison sites then you can often get £25 to £30 in cashback – an extra saving these switching services don’t pass on. However some, including Look After My Bills offer Amazon gift cards when you complete your first switch.

It’s actually not hard to do it yourself

It takes me just 10 minutes to switch my energy each year, and 10 seconds to put a reminder in my diary to do it again in another year. And by doing it myself I can avoid most of the following downsides to using an auto-switching service.

There’s a minimum saving needed before you are switched

You’ll only be switched if you reach a minimum saving over the year – usually £50. Now, in practice that won’t make much difference. If you’re on a fixed deal and that ends it’s very likely you’ll find a saving of at least £50 by fixing again. Still it does mean you could miss out on some deals because they’re under the minimum.

You’ll still need to give meter readings

Unless you are on a smart meter, you’ll need to give meter readings throughout the year to get accurate bills. And you will have to do this when you are switched. So these services aren’t completely hassle-free if that’s what you are after.

And even if you do have a smart meter, it might stop working when you switch. This is the case for all energy switching, but it’s worth checking whether your smart meter will turn into a dumb meter when you are moved to a new company.

Auto-switching services compared

There are a growing number of these services, making it tough to know which one to use. In reality, they are all pretty similar, so it’s incentives like free Amazon gift cards that can make the difference, though also keep an eye on the minimum saving before you are switched. Here are a few of the leading options:

MSE Autoswitch

• Cost: Free
• Minimum saving to switch: £0

This entry to auto-switching from Money Saving Expert is going to be a game changer. Most of the negatives I’ve listed above won’t apply to this service.

You’ll get access to the whole of market – so pretty much all the different tariffs except any exclusive deals on other sites. You’ll also still get the £25 cashback when it’s available.

A big difference is that a switch will only happen every year or so – i.e. when a fix ends – rather than when a saving is available. But hopefully if you’re on the best deal already it’s unlikely that a significantly cheaper deal will come along, especially when you factor in exit fees.

I’ll certainly be signing up for this – but since my current fix doesn’t end until March 2021 it’ll be a while before I can properly interrorgate whether I’ll getting a better deal myself or via the autoswitch service.

Sign up for MSE Autoswtich

Look After My Bills 

• Cost: Free
• Minimum saving to switch: £50

Lots of people will know Look After My Bills after its founders appeared on Dragon’s Den. It’s a free service as the company takes a cut from the commission it is paid for switching you. You’ll be switched if the annual saving is £50 or more.

You can also get a £10 Amazon gift card when you sign up via this link. You won’t get the card until the first switch happens. It has the edge of the higher paying WeFlip offer (if it’s running) as you have to complete a switch in the promotional period – which might not happen!

> Sign up to Look After My Bills 

WeFlip

• Cost: Free
• Minimum saving to switch: £50

This one comes from comparison giants GoCompare.

Switchcraft

• Cost: Free
• Minimum saving to switch: Once a year (or if prices go up by 10% on variable tariffs)

Another free service. Again it’s likely you’ll only be switched once a year.

> Sign up to Switchcraft

Flipper

• Cost: £30 a year
• Minimum saving to switch: £50

A mate of mine actually signed up to Flipper and was “Flipped” twice in the first year. For this he paid a £30 annual fee. He certainly saved money but I still think he’d have been better off doing it himself or using a free service.

> Sign up to Flipper

Switchd

• Cost: between £0 and £59.88 a year
• Minimum saving to switch: £50

This one also keeps monitoring alternative tariffs on a daily basis. There’s a free option and tiered paid levels. You won’t get charged by Switchd until you’ve saved at least £50. Then you start paying, with fees starting at £1.99 a month. Which means you could pay £23.88 each year.

There is a green energy option.

> Sign up to Switchd

Labrador

• Cost: Free
• Minimum saving to switch: £80
• Green energy: Yes

The minimum saving before a switch is higher than the others via Labrador at £80 – and that doesn’t include exit fees. Again, they’ll only switch you to a supplier it has an agreement with, though that does keep the service free to customers to use.

> Sign up to Labrador