After CMA reveals suppliers have overcharged consumers by £1.2bn, energy firms move to introduce cheaper deals and cut prices
Following a 12-month investigation into the energy market, the Competitions and Markets Authority (CMA) revealed that customers could have saved an average of £160 per year by shopping around for the energy.
Instead, they languish on outdated standard plans, staying “sticky” with suppliers who, according the CMA, take advantage of their lack of engagement with the energy market to remain uncompetitive.
Suppliers step up with cheap deals
Days after these findings were released, three suppliers have already announced changes that indicate the CMA’s report is stirring the market up.
First to act was SSE — the big six supplier launched the cheapest fixed plan since 2013.
Costing just £899 a year for the average dual fuel household, uSwitch Director of Consumer Policy Ann Robinson noted that the deal clocked in at more than £300 cheaper than the average big six standard plan and offered fixed rates for 12 months.
The move caused Robinson to say that it could be “the firing pistol for an industry price war.”
First Utility was next up to launch a cheap fixed energy deal, unveiling last week a fixed plan that is just £6 more than the current cheapest fixed plan, but is fixed for five months longer.
Coming in at £905 for the average dual fuel household, and fixed until December 2016, the First Utility deal is a good choice for those who want price security for a bit longer.
Update on :
Following the removal of SSE’s cheapest fixed price tariff on 21st July, Sainsbury’s Energy have stepped up to the plate to offer a cheap fixed price plan that lasts 12 months.
This new SE Fixed Price August 2016, produces an average bill size of £903.51, now making this the cheapest fixed plan on the market.*
Compare these new energy plan prices to see if they could save you money on your current energy bill.
Big six price cuts
British Gas announced that it would cut prices on its standard gas plans by 5% — the only supplier so far to act in a way that is directly beneficial to the “sticky” customers who are likely paying the most for their energy.
Though the cut came under fire by critics for not cutting enough off expensive standard plan bills (and was attributed to falling wholesale gas prices, not the CMA’s report), British Gas’s timing on its decision is likely to spur other suppliers to provide cheaper options as well — potentially making the market a more competitive place overall.
*Sainsbury’s Fixed Price August 2016 is the cheapest fixed rate deal currently on the market, based on the average bill size for dual fuel customer consuming medium energy usage as defined by Ofgem. Excludes collective switch schemes.