Who is cheaper than British Gas? (2026)

Who is cheaper than British Gas?

British Gas is one of the UK's largest energy suppliers, but staying on its default standard variable tariff is currently one of the most expensive ways to pay for your gas and electricity. Following a 13% rise in the Ofgem price cap on 1 July 2026, household energy bills have jumped again, driven by wholesale gas spikes and global shipping disruptions. This has prompted many households to look for cheaper alternatives.

The good news is that several challenger brands and large competitors are actively undercutting British Gas. Suppliers like Outfox the Market, Octopus Energy, and E.ON Next currently offer tariffs that sit below the Ofgem price cap. Whether you want the security of a fixed deal, the flexibility of a tracker tariff, or a supplier with better customer service, you have options.

Switching supplier is a straightforward process, but finding the right deal depends on how much energy you use, how you pay, and whether you are willing to lock in your prices for a year. This guide explains how the current market works, compares the cheapest alternatives to British Gas, and highlights the practical trade-offs you need to consider before you switch.

Understanding the July 2026 energy market

To understand why some suppliers are cheaper than British Gas, it helps to look at how the energy market is priced right now. On 1 July 2026, the Ofgem price cap increased by roughly 13%. For a typical household paying by Direct Debit, the cap is now set at £1,663 a year.

It is important to know that Ofgem recently updated its typical domestic consumption values. These are the figures the regulator uses to estimate how much energy an average home uses. Under the new, lower usage estimates, the cap equates to around £1,663 a year. However, the price cap does not limit your total bill. It only caps the maximum amount a supplier can charge for each unit of gas and electricity, plus the daily standing charge. If you use more energy, you will pay more.

British Gas, like most large suppliers, sets its standard variable tariff right at the limit of the Ofgem price cap. If you have never switched, or if your previous fixed deal ended and you did nothing, you are almost certainly on this default tariff. Because this tariff hugs the cap limit, it leaves plenty of room for competing suppliers to offer cheaper rates to win your custom.

The market is also seeing some positive changes for consumers. From April 2026, Energy Company Obligation costs were removed from bills and 75% of domestic Renewables Obligation costs were moved to general taxation. Together, the changes are expected to reduce average household energy-bill costs by around £150 a year. On top of this, the government will cut the VAT on household electricity from 5% to 0% starting on 1 October 2026. This cut will be applied automatically to your bills, so you do not need to switch supplier just to get it.

Comparing the cheapest suppliers

If you want to leave British Gas, several suppliers offer better value. The exact savings depend on your region and how much energy you use, but the national averages give a clear picture of who is cheapest.

Outfox the Market is currently offering some of the cheapest fixed deals available. In July 2026, their 24-month fixed tariff undercut the Ofgem price cap by around £316 a year. They also offer a tracker tariff that is guaranteed to stay at least 5% below the price cap. This makes them a strong choice if price is your only concern.

Octopus Energy is one of the UK's largest suppliers and consistently beats British Gas on both price and customer service. Their standard variable tariff, called Flexible Octopus, usually sits slightly below the price cap, saving households around £15 a year compared to the British Gas equivalent. Exit fees should be checked carefully before fixing. Octopus says its current year-long fixed tariff has a £50 exit fee per fuel, so leaving early may cost money.

E.ON Next offers a different approach with its Next Pledge tracker tariff. This tariff guarantees a discount of £50 below the Ofgem price cap. Because the price cap changes every three months, your rates will go up and down, but E.ON Next promises you will always pay £50 less than the cap limit over the course of a year. They have also introduced a hybrid tariff called Next Steady, which offers immediate below-cap pricing.

EDF Energy is another option worth checking. Their mid-length fixed products have scored slightly cheaper than the British Gas equivalents in recent months. However, suppliers like OVO Energy and ScottishPower are currently struggling to beat British Gas on price. ScottishPower's standard variable tariff is notably more expensive, so switching to them from British Gas is unlikely to save you money.

Choosing the right type of tariff

Finding a cheaper supplier is only half the task. You also need to choose the right type of tariff. The energy market offers three main options: standard variable tariffs, fixed tariffs, and tracker tariffs. Each has different rules, benefits, and risks.

Standard variable tariffs are the default option. The rates on these tariffs change every three months in line with the Ofgem price cap. If wholesale energy prices fall, your bills go down. If wholesale prices rise, your bills go up. British Gas, Octopus, and all other major suppliers offer these. They do not have exit fees, so you are free to leave at any time.

Fixed tariffs lock in your unit rates and standing charges for a set period, usually 12 or 24 months. Because the price cap rose by 13% in July 2026, fixing your rates can give you peace of mind. If global gas prices spike again, your bills will not go up. However, if energy prices drop, you will be stuck paying the higher fixed rate. Most suppliers, including British Gas and OVO, charge an exit fee of around £50 to £75 per fuel if you want to leave a fixed deal early. Exit fees vary by tariff and supplier; Octopus says its current year-long fixed tariff has a £50 exit fee per fuel.

Tracker tariffs have variable rates, but their pricing formulas differ. Some, such as E.ON Next Pledge, are designed to stay below the Ofgem price cap. Others, including wholesale-linked trackers, can move independently of the cap and may cost more at times. Check the tariff formula, any price limits and exit terms before signing up.

How your usage affects the cheapest option

The cheapest supplier for your neighbour might not be the cheapest supplier for you. Energy bills are made up of two parts: the unit rate and the standing charge. The unit rate is what you pay for the actual gas and electricity you use. The standing charge is a fixed daily fee you pay just to be connected to the grid, regardless of how much energy you use.

If you are a high-energy user, perhaps with a large family or a poorly insulated home, the unit rate is the most important number. Because you use a lot of units, a cheaper unit rate will save you a lot of money. For high users, Outfox the Market and Octopus Energy are currently the cheapest options.

If you are a low-energy user, the standing charge makes up a much larger chunk of your total bill. Historically, British Gas has offered some of the lowest standing charges on the market, which can make them surprisingly competitive for homes that use very little energy. However, the standing charge system is changing.

From April 2026, Ofgem began a year-long lower-standing-charge tariff pilot involving British Gas, EDF, E.ON and Octopus. These tariffs are designed to help low-usage households by cutting the daily fixed fee. The trade-off is that these suppliers raise the unit rate to compensate. If you barely use any energy, these trial tariffs could save you money. But if your usage goes up, perhaps during a cold snap, the higher unit rates could end up costing you more overall.

The government has also changed how the Warm Home Discount is funded. The costs for this scheme were recently moved from the standing charge to the unit rate. This makes the standing charge slightly cheaper for everyone, but increases the cost of the energy you actually use.

Smart tariffs and electric vehicles

If you have a smart meter, you can access time-of-use tariffs. These tariffs charge different rates at different times of the day. If you can shift your energy use to off-peak times, you can save a significant amount of money.

British Gas offers a smart tariff called PeakSave. This scheme gives customers half-price electricity on Sundays. If you save your heavy washing, tumble drying, and meal prep for Sunday, you can cut your weekly electricity costs without having to switch to a smaller supplier.

However, Octopus Energy leads the market for smart tariffs. Their Intelligent Octopus Go tariff is designed specifically for electric vehicle owners. It offers ultra-cheap electricity overnight, allowing you to charge your car, run your dishwasher, and heat your water for a fraction of the normal daytime cost. If you own an EV or a heat pump, switching from a standard British Gas tariff to a specialist Octopus smart tariff is one of the most effective ways to lower your bills.

How to switch away from British Gas

Switching your energy supplier is entirely administrative. Nobody needs to visit your home, nobody needs to change your pipes, and your gas and electricity supply will not be turned off. The new supplier simply takes over the billing.

Under the Energy Switch Guarantee, most switches in Great Britain now complete within five working days. The process is designed to be seamless. You just need to choose a new tariff, provide a few details, and your new supplier handles the rest. They will contact British Gas to tell them you are leaving and arrange the handover date.

If you receive the Warm Home Discount, check the switching rules carefully. For Core Group customers, the supplier you were with on the scheme qualifying date is responsible for payment if you were eligible. In Scotland's Broader Group, check whether the new supplier participates and whether you need to apply.

Final thoughts on leaving British Gas