Warning bell: cost of fixed price energy plans start to creep up
EDF Energy launches the longest fixed price energy deal on the market enabling consumers to lock in their energy price until the end of November 2016
The new plan will cost consumers £1,350 a year on average which is £32 a year more expensive than npower’s Price Fix September 2016, previously the longest fix on the market
The new plan is £215 more expensive than the cheapest plan on the market, which is also fixed price, however it offers over two years extra protection from potential price hikes with no cancellation fees.
Today, EDF Energy launches its new Blue + Price Freeeeze November 2016 tariff, enabling consumers to fix their energy prices for over three years. This latest salvo in the long-term fixed price battle wins EDF Energy the title of the longest fix on the market, swiping the crown from npower with its Price Fix September 2016.
With price rises last winter and continued uncertainty in the energy market, three in ten switchers have been opting for fixed price tariffs. The new EDF Energy plan offers long-term price security with no exit fees, but at £1,350 a year, this security now comes at a cost.
The plan comes in at just £3 a year cheaper than the average standard plan for customers paying by cash or cheque, one of the most expensive types of tariff on the market. However, at the time of its launch in May, npower’s Price Fix September 2016 offered the same length of protection (41 months) and no cancellation fees for £1,318 a year, £32 a year less – a telling sign that a premium is creeping back onto fixed priced plans. In addition, EDF Energy has removed its Blue + Price Promise February 2015 and replaced it with the Blue + Price Promise September 2014, which at £1,210 a year is £18 a year more expensive and almost half a year shorter than its predecessor.
While almost three and a half years protection is a great comfort, many consumers might be willing to hedge their bets and go for one of the cheaper plans on the market. Fortunately there are a number of competitive short and mid-term fixed price plans available, which could give consumers the protection they want for a fraction of the cost. In fact, the cheapest tariff on the market, Flow Energy’s Thames Fixed Online Sept 2014 is fixed until September 2014 and costs £1,135 a year, a saving of £215 against the new EDF Energy plan. However it comes with a £30 cancellation fee per fuel.
The new EDF Energy Blue + Price Promise September 2014 which was also launched today costs £1,210 a year – £140 cheaper than its long-term counterpart and also comes without cancellation fees. While only protecting consumers for fifteen months, this might be more appealing to those looking for a comfortable middle ground between protection and value for money.
|
Type of plan
|
Tariff name
|
Cost
|
Fixed until
|
Average standard (cash and cheque)
|
N/A
|
£1,353
|
N/A
| |
Average standard (direct debit)
|
N/A
|
£1,265
|
N/A
| |
Cheapest variable
|
SSE Discount Energy Bonus October 2014 (with paperless billing)
|
£1,146
|
N/A
| |
Cheapest fixed
|
Flow Energy’s Thames Fixed Online Sept 2014
|
£1,135*
|
31/8/2014
| |
Cheapest fixed no cancellation fees
|
npower’s Online Price Fix February 2015
|
£1,181
|
28/02/2015
| |
Second longest fix, plus no cancellation fees
|
npower’s Price Fix September 2016
|
£1,318
|
30/9/2016
| |
Longest-term fix, plus no cancellation fees
|
Bue + Price Freeeeze November 2016
|
£1,350
|
30/11/2016
|
Source: Uswitch.com
Bill sizes are based on a medium user customer using 3,300 kWh of electricity and 16,500 kWh of gas paying by direct debit in arrears with bill sizes averaged across all regions, except for standard (cash and cheque). Average standard is an average of the big six suppliers. *Requires payment in advance.
Tom Lyon, energy expert at Uswitch.com, says: “Fixed price plans have increasingly dominated the best buy tables offering competitive prices, good guarantees and often no exit penalties. But with the premium to fix starting to creep back in, alarm bells are ringing and the decision to fix is starting to become more of a gamble for the cost-conscious consumer.
“It is now more important than ever that consumers heed this warning and ensure that they are looking into all options and moving to a tariff that best suits their needs. If they are willing to pay a premium for long-term price security then EDF Energy’s new offering could be the answer to their prayers. However, there are also a number of short and mid-term fixed price plans which offer the best of both worlds – security without the initial extra cost.”
FOR MORE INFORMATION
Alexa Wheeler
Phone: 0207 1484 661
Email: alexa.wheeler@uswitch.com
Twitter: @uswitchPR
Notes to editors
Bill size based on a medium customer using 3,300 kWh of electricity and 16,500 kWh of gas with bill sizes averaged across all regions. Difference of £32 between npower’s Price Fix September 2016 at £1,318 a year and EDF Energy’s Blue+Price Freeeeze at £1,350 a year.
Bill is based on a medium user 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 of £215 between EDF Energy’s Blue+Price Freeeeze at £1,350 a year and Flow Energy’s Thames Fixed Online Sept 2014at £1,135 a year.
Uswitch.com data.
Difference of £3 between the average standard plan (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) which is £1,353 a year and EDF Energy’s Blue+Price Freeeeze at £1,350 a year.
Difference of £18 between EDF Energy’s Blue +Price Promise September 2014 at £1,210 and EDF Energy’s Blue +Price Promise February 2015 at £1,192 a year.
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