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Big six offer competitive fixed plans amid dropping wholesale costs — but is it enough? — Updated

Big six offer competitive fixed plans amid dropping wholesale costs — but is it enough? — Updated

On Wednesday, E.ON announced a cut to their standard gas prices by 5.1%, as well as releasing the market's cheapest fixed deal at the time (this was subsequently the cheapest fixed deal in over four years).

A 5.1% cut to E.ON's standard gas cost is the equivalent to 3 weeks of a customer's gas usage — or £32 off an annual bill. This is the first price cut from a Big Six supplier since August 2015, despite continuously falling wholesale costs.

E.ON has, however, made more effort than most: along with British Gas it is just one of two suppliers to have made two gas cuts within 12 months. British Gas' standard gas cuts totalled 10%, and E.ON is now just behind at 8.5%.

Wholesale electricity alone has dropped 23% percent in the last year, and yet no Big Six supplier has passed on these savings as cuts to the standard cost of electricity for their customers.

The fight for the cheapest fixed plan

When E.ON announced the news of its 5.1% gas cut, it came as a bonus to see them release the cheapest fixed plan alongside the standard price drop. The tariff on offer came in at an average £783 a year, however, less-established supplier Extra Energy was quick to undercut them.

This morning, SSE reigned supreme in offering a fixed plan of just £775, topping the table of fixed deals from energy suppliers.

Updated 22/01/16: E.ON then fought back to provide an even cheaper tariff at £769, to be undercut once again by Extra Energy.

This means that the difference between the average big six standard plan and the cheapest fixed deal, is now over £320 a year.

Whilst cheap fixed plans are welcomed with open arms for those of us who shop around and switch, it's the sticky customers not budging from standard plans that continue to miss out.

Where are the double-digit cuts?

When standard energy price cuts haven't reached the levels of wholesale price drops, it's easy to see that many of us are still being overcharged for our loyalty to energy suppliers.

Ann Robinson, Director of Consumer Policy at Uswitch, said:

"With wholesale prices predicted to remain low this year, consumers should be seeing bill reductions of at least 10% – around £120 a year – on both gas and electricity.

“Now is the time for the other major suppliers to step up to the plate and offer decent, double-digit reductions to help hard-pressed consumers – many of whom are rationing their heating this winter just to make ends meet."


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