£200 bill hike as cheap energy deals come to an end
Consumers who flocked to cheap fixed price energy deals could see energy costs rocket as deals expire
Energy bills could rise by up to £214 as three ‘super-cheap’ price guarantee plans come to an end in the next two months
However, consumers on other fixed price plans could see their bills fall as their price guarantee ends
Households urged to look at all competitive deals currently available before signing up to their next energy plan.
Three ‘super cheap’ fixed priced energy tariffs, costing just over £1,000 a year, are coming to an end from 31st March. The plans have been safeguarding customers from price hikes since December 2011. But with this shelter about to end, if customers aren’t vigilant they could see their energy bills rocket, warns Uswitch.com, the independent price comparison and switching service.
The three plans – EDF Energy’s Fix to March 2013 and npower’s Go Fix 10 and 11 – cost £1,064 a year on average. In contrast, the same customer moving onto their supplier’s standard plan today could expect to be paying £1,255 a year on average – £191 or 18% more. In the worst case scenario customers could see their bills go up by £214 as their fixed price ends.
The cheapest of the three, npower’s Go Fix 11, ends 21st May. It costs £1,033 a year on average. This is £214 cheaper than the plan that npower is rolling customers onto (Go Save S) and even £151 cheaper than npower’s current best buy plan, Energy Online August 2014, which costs £1,184 a year. This means that customers sticking with the supplier will face a substantial bill hike even if they are savvy enough to move to its cheapest plan.
However, having benefitted from the protection afforded by their expiring fixed price deal, these customers might be on the hunt for a new safe haven from price hikes. The cheapest fixed price tariff is Ovo’s New Energy Fixed, which fixes prices for 12 months from going live and costs £1,172 a year. This would mean seeing bills increase by a slightly lower £139 a year, but the length of the fixed price protection may not be enough to satisfy everyone.
In this case, EDF Energy’s Blue + Price Promise June 2014 costs £1,182 a year and protects customers from price increases until the end of June 2014. Importantly, it doesn’t carry an early exit penalty which means customers are free to move on should energy prices fall in the future. In addition, npower recently launched the longest fixed price tariff on the market – Price Fix December 2015. This offers price protection until the end of 2015 and costs £1,305 a year.
But while customers on the three ‘super cheap’ fixed price deals will be seeing their bills going up, others are not so ‘lucky’ – their bills will be going down when their fixed price guarantee ends, which means that they have been locked-in at a higher price than they needed to have been paying.
One such plan is British Gas’ Fixed Price March 2013, which consumers were able to sign up to back in July 2011 and which costs £1,307 a year. This is £34 a year more expensive than British Gas’ current standard direct debit price, even though the supplier increased its prices at the end of last year.
This is why it is so important for consumers to consider all options before signing up to their next deal. Suppliers are expected to be contacting householders on plans that are due to end to let them know what their options are.
Thomas Lyon, energy expert at Uswitch.com, says: “Fixed price energy plans are designed to protect consumers from price hikes. The fact that so many people will be seeing their energy bills go up as their current fixed price deal comes to an end means that these plans have been doing their job.
“Many of these households face an increase of over £200, which reflects how much energy prices have rocketed in the intervening years, but could still come as a bit of a shock. With energy prices so high, and so much uncertainty over future prices, they now have an important decision to make and we would urge them to take the time to shop around.
“The choice will fall between taking a cheaper variable plan, which will give you the lowest price today but will not protect you from price hikes. Or, opt for a competitive new fixed price plan. These carry a small premium, but give you the security and peace of mind that many households value, especially as indications are that prices will continue to go up.
“For those who prefer the security of a fixed price plan, see what your current supplier can offer, but then compare with other fixed price plans on the market to find the most competitive deal. It’s also important to be aware that most, but not all, fixed price plans carry an early exit fee – consumers should always check the small print carefully and ensure that an energy plan meets their needs before signing on the dotted line.”
Snapshot of fixed price plans coming to an end:
|
Plans coming to an end
|
Price of plan ending
|
Current Standard DD price
|
Difference
|
EDF Energy – Fix to March 2013
(ends 31st March)
|
£1,080
|
£1,251
|
+ £171
| |
npower Go Fix 10
(ends 8th April)
|
£1,078
|
£1,247*
|
+ £169
| |
npower Go Fix 11
(ends 21st May)
|
£1,033
|
£1,247*
|
+ £214
| |
npower Winter Fix
(ends 31st March)
|
£1,188
|
£1,258
|
£70
| |
British Gas
Fixed Price March 2013
(ends 31st March)
|
£1,307
|
£1,273
|
– £34
| |
ScottishPower Online Fixed Energy May 2013
(ends 30th April)
|
£1,144
|
£1,271
|
£127
|
Source: Uswitch.com. Prices correct as of 29th March, 2013. The above is a snapshot of plans coming to an end, not an extensive list. Bill sizes based on a medium user consuming 3,300kWh of electricity and 16,500kWh of gas per annum. All bill sizes averaged across all regions. *Includes online discount.
Notes to editors
See table above – ‘super cheap’ refers to the three plans highlighted.
Based on a medium user consuming 3,300kWh electricity and 16,500 kWh gas per annum paying by direct debit with bill sizes averaged across all regions.
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