As one energy supplier hints of future price hikes, another launches the longest fixed price deal on the market
npower launches the longest fixed price energy deal on the market, giving consumers protection against price hikes until the end of 2015 (31st December)
The new plan costs £1,305 a year on average – £48 cheaper than the average standard cash and cheque plan, but £171 more than the cheapest variable priced deal
The second longest fixed price plan costs £86 more a year and ends eight months earlier leaving customers vulnerable to higher prices before winter 2015
With a fixed term of just under three years, npower’s new deal could appeal to those on a tight budget.
Today, npower has launched the longest fixed price energy deal on the market, enabling consumers to lock their energy prices until 31st December, 2015. At £1,305 a year, the plan comes out cheaper than any of the big six suppliers’ standard cash and cheque plans. This means that consumers sat on old-fashioned and expensive standard tariffs could save almost £50 a year on average by switching to npower’s new plan, while also being protected from price hikes until the end of 2015.
The plan could prove to be a potential saving grace for consumers, with two of Britain’s big six energy suppliers indicating that households can expect energy bills to soar further this year. This week, E.ON refused to rule out a price hike in 2013 pointing to ‘significant uncertainty’ towards the end of the year. Similarly, British Gas stated last October that a further £60 could be added onto household bills this year.
This would make a long-term fixed price deal attractive, especially to those on a tight budget. However, there are cheaper plans out there for those prepared to take their chances with potential price hikes. SSE’s Discount Energy Bonus May 2015 tariff (with paperless billing) costs £1,134 a year, making it the cheapest variable priced deal on the market. It costs £171 less than npower’s new fixed price plan, however, it offers no price guarantee.
And of course there are cheaper fixed price plans available, such as Ovo’s New Energy Fixed deal. At £1,172 a year it is £133 cheaper than npower’s new deal, but only guarantees prices for 12 months from going live. The next longest fixed price plan behind npower’s is British Gas’ Price Promise April 2015, which offers price protection until the end of April 2015. This costs £1,391 a year, which is actually £86 a year more expensive and ends eight months earlier than the npower plan.
Tom Lyon, energy expert at Uswitch.com, says: “As evidence stacks up for another hike to our bills this year, consumers should consider all options including whether they would feel more confident and secure with a long-term fixed price tariff. This new npower plan could be a saving grace to consumers looking to shield themselves from the seemingly inevitable price hikes heading our way.
“It’s by no means the cheapest deal on the market, but it does offer shelter from price hikes until the end of 2015. However, it comes with a £50 cancellation fee per fuel, so consumers should weigh this up carefully before signing up. Importantly though, if you’ve never switched and are currently sat on one of the most expensive standard tariffs on the market then you could save almost £50 a year by signing up to this deal. With the added bonus of a price freeze for almost three years, this new offer by npower starts to look quite enticing.”
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Average standard (Cash and cheque)
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N/A
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£1,353
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Variable
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Average standard (Direct Debit)
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N/A
|
£1,265
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Variable
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Cheapest Variable ‘best buy’
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SSE’s Discount Energy Bonus May 2015 (with paperless billing)
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£1,134
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Variable
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Cheapest fixed price
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Ovo’s New Energy Fixed deal
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£1,172
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Fixed for 12 months from going live
| |
Second longest fixed price
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British Gas’ Price Promise April 2015
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£1,391
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Fixed until end April 2015
| |
Longest fixed price
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Npower’s Price Fix December 2015
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£1,305
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Fixed until 31st December 2015
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Source: Uswitch.com
Notes to editors
Bill size based on a medium user npower customer using 3,300 kWh of electricity and 16,500 kWh of gas paying by direct debit with bill sizes averaged across all regions.
Bill size based on a medium user customer using 3,300 kWh of electricity and 16,500 kWh of gas paying quarterly by cash or cheque with bill sizes averaged across the big six suppliers and all regions. Difference is £48 between the average standard plan (across all ‘Big Six’ suppliers) which is £1,353 a year and npower’s Price Fix December 2015 at £1,305 a year.
Bill is based on a medium user SSE customer using 3,300 kWh of electricity and 16,500 kWh of gas paying monthly by direct debit with bill sizes averaged across all regions. Difference is £171 between npower’s Price Fix December 2015 and the cheapest price variable plan on the market which is SSE’s Discount Energy Bonus May 2015 (with paperless billing) at £1,134.
Bill size based on a medium user British Gas customer using 3,300 kWh of electricity and 16,500 kWh of gas paying by direct debit with bill sizes averaged across all regions. Difference is £86 between British Gas’ Price Promise April 2015 at £1,391 and npower’s Price Fix December 2015 at £1,305 a year.
Tony Cocker, CEO of E.ON on 13th March, Today programme on BBC Radio 4.
http://www.centrica.com/index.asp?pageid=29&newsid=2588 British Gas pricing announcement 12th October, 2012. In the section ‘Why prices are rising’ it says: “There are other costs behind energy bills, and these are also increasing. Britain’s national grid requires a major upgrade, which is being funded through energy bills, and the costs of the Government’s policies that will ensure a clean, energy-efficient Britain, are also rising. Together, these have added around £50 to the cost of supplying the average customer’s home this year, and are expected to add nearly £60 to the cost of supplying the average customer’s home next year.”
Bill is based on a medium user Ovo customer using 3,300 kWh of electricity and 16,500 kWh of gas paying monthly by direct debit with bill sizes averaged across all regions.
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