Despite wide spread standard tariff price cuts seen in the first half of 2016, it could be that consumers will now experience more expensive energy deals.
Back in January 2016 all of the “big six” suppliers reduced the cost of their standard rates for gas and electricity, and many competitive fixed deals emerged on the energy market. Since then, suppliers of all sizes continued with an influx of cheaper deals — but now there are signs of change coming to the energy market.
Suppliers’ fixed deal prices creeping up
The uncertainty of wholesale costs, blamed in part on the Brexit referendum result, has seen some suppliers removing fixed deals from the market and replacing them with more expensive alternatives.
21 energy suppliers in total have replaced their cheapest fixed price deal with more expensive plans since June, increasing prices by an average of £23. The largest increase is with Co-operative Energy, whose ‘Co-op Fix for Longer September 2017’ tariff, costing £770 at the start of June, has since been replaced twice. Its equivalent deal, ‘Co-op Online October 2017’, now costs £989, an increase of £219.
In addition, Eight suppliers, including Co-operative Energy, EDF, OVO Energy, Flow and Octopus have increased deal prices more than once.
Co-operative Energy also raises standard energy price by 3%
Although some of the cheapest fixed deals have been disappearing from the market, Co-op Energy is the only supplier yet to have also upped the price of their standard tariff — this is usually the default tariff you are put onto when a fixed plan has ended or if you’ve never switched (these plans are often the most expensive).
The 3% price rise that comes into effect on 1st October, now makes Co-op Energy’s standard tariff more expensive than those of any of the “big six” suppliers’ (British Gas, SSE, ScottishPower, E.ON, EDF, and npower).
The rise means the average household bill for a Co-op Energy dual fuel customer on a standard plan will increase from £1,152 to £1,184 a year; it also means Co-op Energy are the first major energy supplier to raise the price of a standard tariff since 2014 — this is in addition to its increase in fixed deal prices of £219 this summer.
Unfortunately, the biggest increase comes to those who may be the most vulnerable: customers on a Co-op Energy prepayment meter will see bills rise by 6% from £1,115 to £1,184 per year.
Despite the rises, big savings can still be made
Claire Osborne, uSwitch energy expert, says: “Many suppliers are increasing the price of their cheapest energy deals amid concerns about rising wholesale energy costs and uncertainty in the market following the EU referendum. It remains to be seen whether this is just a blip — and wholesale prices still remain well below their high levels in 2013.
“The good news for consumers is that, despite these rises, the market’s most competitive plans are still hundreds of pounds less than the average big six standard tariff. Those who are concerned about their energy bills going up, especially as we head towards the autumn, should look around to see whether they can switch to a better tariff and consider fixed deals that can provide protection against further potential price rises.”