Energy price hikes are back and our Money Saving Expert Martin Lewis has an urgent warning for all gas & electricity customers...
Scottish & Southern Energy (SSE) last week became the first of the big six energy firms to announce a winter price rise, in a bitter blow to millions of households.
The giant is raising gas and electricity prices by an average 9% from 15 October. Anyone with its Atlantic, Scottish Hydro, Southern Electric and Swalec brands will be hit, unless they are on a fixed rate deal.
Energy firms usually behave like sheep. When one moves, so do the rest, so the other companies are likely to follow - though perhaps it's a tiny bit less certain this time as this SSE hike was a shock. However the Bank of England had already predicted smaller hikes for this winter.
The one exception is Eon, as it has pledged not to raise prices until the end of the year. Though in the past when companies have done that, they normally raise them straight after (for example SSE's current promise not to hike lasts until October).
You're warning people to fix urgently? Why?
Millions are overpaying for energy. A typical home on a standard tariff pays £1,310, yet switch to a cheap tariff and it can drop to £1,040 for the SAME gas, SAME electricity and SAME safety. Only customer service and price change.
It's worth noting when standard price hikes have been announced previously, there's a short window before the market's cheapest fixes are pulled, so there may be a very brief period to get this sorted.
The new version of EDF's Blue tariff is almost the market's cheapest, at a typical £1,058 a year. But it has three killer features it's important not to miss when using comparisons:
- It's fixed until April 2014, so no price hikes for two winters.
- Unusually, it has no exit penalties, so if things change, you can leave.
- It promises to email if anyone launches a tariff £52/year cheaper.
The other cheap fix without exit penalties is Scottish Power's Online Fixed Price Energy. It's slightly cheaper than EDF for most people at £1,050 a year for a typical household, but the price is only locked in for one winter until 31 October.
Neither of these have exit penalties, so there's no downside. You can switch to them now, (always do a comparison to ensure they'll save you money, in case you're already locked in to a previous discounted or fixed tariff) get the lock in price, but in the relatively unlikely event other prices were to drop seriously, it's not a problem as you can leave at no cost.
To decide, compare to find your cheapest
Your exact winner depends on your region and usage. So use a Consumer Focus-accredited comparison site to see how the two tariffs above actually work out.
If you don't want to fix then the best thing to do is stick. As the market is in a state of flux and it's likely other providers will follow, so switching to a normal (non fixed) tariff to save, may mean the provider you move to raises prices soon and thus you've jumped from the frying pan into the fire.
For more information see the useful links section