More Big Six suppliers have announced that they will cut the price of gas within their standard tariffs. E.ON announced their 5.1% price cut, followed by SSE cutting 5.3% off their gas price, and now ScottishPower and npower are following suit with 5.4% (ScottishPower) and 5.2% (npower) cuts effective from 15th March and 28th March.
Just one month in, and 2016 has already seen fierce competition between suppliers to top comparison tables by offering the cheapest fixed energy deal on the market.
On 20th January E.ON announced their gas price cut of 5.1% and also released a fixed price energy plan that was the cheapest the market had seen in nearly five years. This plan sparked a battle for the top spot of cheapest plan on the market, with smaller suppliers and the Big Six's SSE and E.ON battling it out to better one another's lowest fixed price for energy.
Usually, the cheapest fixed plans are offered by less established suppliers, but this new trend for Big Six suppliers to become involved in the race is an unexpected effort by larger suppliers to be more competitive. Supplier's latest efforts with gas cuts however, whilst welcome, fall short of expectations for 10% reductions or more for both electricity and gas.
With fixed deals commonly lasting for around 12 months, your gas and electricity rates will not go up or down for the duration of the plan. Although this sounds like a possibly bad idea in a situation where wholesale prices for both electricity and gas continue to fall, the plans still offer incomparable rates to standard energy plans — and they've now reached the lowest they've been in nearly five years.
In a market where the falls in wholesale costs are not reflected within standard energy plans, there is little reason to stay put on one.
Many consumers may have been on a fixed deal which expired, meaning they'd have been automatically rolled onto their supplier's standard plan unless they switched again to another competitive fixed plan.
uSwitch.com Director of Consumer Policy, Ann Robinson, says:
“Instead of waiting around for token-gesture price cuts, big six standard plan customers should do their own price cut by switching to a cheaper fixed deal, saving more than £320 a year.”