Beat energy price hikes with a fixed-rate tariff

Big Six energy companies: what’s the latest news on prices and the proposed price cap?

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So far in 2018 energy customers have seen multiple price hikes from the Bix Six energy providers, and from a number of smaller companies.

Scottish Power revealed its latest increase - its second of the year - on 24 August, hitting its standard variable rate customers with an average 3.7% hike that will take effect on 8 October 2018.

This will increase typical bills by £46 a year. It raised prices by 5.5% at the beginning of June.

British Gas announced its second increase of the year on 8 August, adding another £44 to the bills of its four million standard variable rate customers.

Firms are blaming rising wholesale energy costs and increased government levies for the increases.

But the increases are affecting standard variable rate (SVR) dual fuel deals - you can save £250 by switching to a fixed-rate deal. You can even save by switching with the same firm, as long as you ditch the expensive SVR option.

The savings on offer to SVR customers who switch and fix today far outstrip the proposed government price cap, which is scheduled to come into effect before the end of 2018.

The cap is intended to save SVR customers £100 a year on their energy bills, but this amount if dwarfed by the available savings from switching today. The average cost of a Big Six energy firm SVR for a typical household is over £1,200, but if you run a 5-minute energy quote at MoneySuperMarket, you’ll find tariffs costing much less - with some costing under £900 a year.

When you switch, the work will be done behind the scenes by the firms involved - there’ll normally be no need for work to be carried out at your house, and there’ll be no interruption to your supply. The whole process should be completed in 21 days, which includes your 14-day statutory cooling-off period.

Here’s a run-down of the Big Six’s energy price hikes for 2018:

British Gas

British Gas announced a 5.5% increase in gas and electricity prices in April, hitting around 4.1 million customers on its standard variable tariff with a £60 a year increase.  

It followed this up by announcing another hike in August which will load an additional £44 onto a typical household’s annual bill if they are on its standard variable rate (SVR) tariff.

It no longer sells SVRs to new customers, but around four million existing customers will be hit when the increase takes effect on 1 October 2018. The typical cost for an average household with British Gas will increase to £1,205 a year.

EDF

On 5 July EDF announced a 6% hike in the cost of its dual fuel (gas and electricity) variable rate tariff, bumping up the price by £70 a year.

Earlier this year, it increased electricity costs by 2.7%, which means dual fuel customers hit by a 1.4% rise from 7 June.

Altogether, this means that the 1.3 million affected customers (41% of their overall customers) will be paying the equivalent of £86 extra a year, with an additional £12 on top for people paying by cash or cheque.

Eon

Eon has removed its dual fuel and standing order discounts on some tariffs, effective from 1 April. This means the average customer on a standard variable tariff will be paying an extra £22 a year, with one in four paying an extra £50.

On 19 June Eon also announced a rise in the price of its standard variable tariff, meaning from 16 August duel fuel customers will be paying an extra £55 (a 4.8% increase). Electricity prices are increasing by 6.2%, with gas rising by 3.3%.

Npower

Npower is increasing its gas prices by 4.4% and electricity prices by 6.2%, meaning an average rise of 5.3% for 40% of its customers. They’ll be paying the equivalent of £64 a year extra from 17 June, with typical dual fuel customers’ annual bill rising to £1,230.

Scottish Power

Scottish Power’s announced it second price hike of the year in August. It will take effect on 8 October 2018 and add £46 to average standard variable rate annual bills.

This will see the typical dual fuel bill for customers paying by direct debit rise to £1,257 per annum.

The firm announced a 5.5% price hike for both gas and electricity in April, effective from 1 June.

SSE

SSE is raising its dual fuel prices by 6.7% as well as removing a £6 per fuel discount for online billing. This means that from 11 July, around 2.36 customers will be paying an extra £76 a year.

Among the smaller firms, we’ve seen rises from:

Cooperative Energy

In July the firm announced a 5.2% increase on its Green Pioneer SVR tariff, which will take the typical price for dual fuel customers up by £60 a year to £1,218.

The increase, which is effective on 20 August, will also hit 60,000 GB Energy customers who moved to the Coop when GB Energy collapsed in 2016.

Bulb

Following a 2.8% rise in February, Bulb has again hiked the price of its only energy tariff, Vari-fair, by a further 5.1%. This brings the annual energy costs for the average household up to £923.

The additional £44 a year price increase will come into effect for existing customers on 12 August, while new customers will start on the new rate immediately.

Switch and fix

You may be overpaying on your energy bills if you’re on a standard variable tariff, particularly if there are ongoing rises in prices.

Switching to a fixed rate deal could help you if you’re in this position as they are often cheaper than variable tariffs, and a fixed rate means you can be sure of how much you’ll be paying for each unit of energy you use for up to three years.

If you’re already on a fixed tariff, keep an eye on the end date as you may slip on to your supplier’s standard variable rate if you don’t find another fixed rate deal. You won’t need to pay exit penalties if you’re within 42-49 days of your contract’s end-date.

Using MoneySuperMarket’s free energy price comparison lets you see the cheapest prices available for the energy services you need, so you can get a quote and find the right deal for you.

 

1Based on dual fuel, monthly direct debit and Ofgem average usage of 12500kwh Gas and 3100kwh Electricity averaged across all regions.

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