As energy bills soar, suppliers battle it out to offer cheapest fixed price tariff
With four of the big six energy companies announcing inflation-busting price hikes and the remaining two expected to follow suit, many consumers have been turning to fixed price energy deals to shield themselves. And now their choice has just got better; in a welcome move E.ON is now matching small supplier First Utility in offering consumers the cheapest fixed price energy deal on the market.
E.ON’s new plan, E.ON Energy Fixed 1 year, will cost customers £1,178 a year making it the joint cheapest fixed price deal and also the cheapest overall big six tariff on the market. Only one small supplier, Spark Energy, is offering a cheaper deal with its Advance 2 tariff at £1,116 a year. However these are variable plans, so consumers won’t be protected from price hikes and could see their prices increase in the future.
E.ON now joins First Utility in the top spot – its iSave Fixed v12 June 2015 tariff also costs £1,178 a year. Both of these plans are £256 a year cheaper than customers on a standard cash and cheque tariff can expect to pay on average once announced price increases take effect. This means that some consumers will not only be getting protection from future price rises, but they will be saving money too.
The small supplier, however, has gone one step further by offering longer protection at 20 months, shielding customers from price hikes up until the end of June 2015. In contrast, E.ON’s plan is only fixed for one year. However, those who opt for First Utility’s plan will be hit with a £30 per fuel cancellation fee if they try to switch before the fix is up. While also carrying an exit penalty, E.ON’s £5 per fuel fee would be much easier to swallow for consumers looking to switch away early.
Tom Lyon, energy expert at Uswitch.com, says: “The writing’s on the wall for consumers who will be feeling the brunt of price hikes this winter. Before price rises were announced, over eight in ten consumers said that they would be rationing their energy use to save on bills. This number is now likely to escalate as fears are realised and people see their bills climb before their eyes.
“Rather than risk their health or well-being, consumers should look at the fixed price energy deals available. It’s great to see First Utility and E.ON lead the way by enabling consumers to lock in their energy bill at a competitive price. But it shouldn’t stop there. To get this market working, suppliers need to be falling over each other to offer the best deals. Competition is critical if we are to see prices fall, service improve and inefficiencies driven out. It’s crucial that consumers show that they won’t stand by and watch their bills rocket – instead they need to be keeping suppliers on their toes by shopping around and snapping up attractive deals while they last.”
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Alexa Wheeler
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Email: alexa.wheeler@uswitch.com
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Notes to editors
Based on a medium user consuming 3,300 kWh of electricity and 16,500 kWh of gas on a dual fuel tariff, paying by monthly direct debit with bill averaged across all regions
Based on a medium user consuming 3,300 kWh of electricity and 16,500 kWh of gas on a standard dual fuel tariff, paying quarterly by cash and cheque, with bill sizes averaged across all regions. Average annual standard bill following price rises annoounced to date will be £1.434 a year. Difference of £256 is £1,434 - £1,178.
3. Research was conducted with the Uswitch.com Consumer Opinion Panel in September 2013 amongst 1,250 adults with bill paying responsibility for their household energy. In response to: ‘Are you planning to cut back on the amount of energy you use this winter to make your bills cheaper?’ 51.3% said ‘I am already doing this’ and 31.2% said ‘Yes, I am planning to’. This adds up to 82.5%.
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