The PM says he’ll tackle energy companies and Ofgem’s saying the same thing. But our Money Saving Expert Martin Lewis says DON’T WAIT for them — act now and you can lock in and beat the price hikes.
David Cameron has promised he’ll legislate to force energy firms to actually give customers their best possible tariffs,and the energy regulator Ofgem’s promised to force companies to tell you of cheaper prices. Yet these are just proposals, they’re not happening now. But price rises are, so don’t delay.
What’s happening with prices?
Energy companies are like sheep, when one moves the rest follow, and we're in price hike time right now. One of the big six has already hiked prices this Autumn, while three of the big six have announced rises to come over the next few months.
Scottish & Southern Energy (and its sub-brands Atlantic, Scottish Hydro, Southern Electric and Swalec) hiked gas and electricity prices by an average of 9% last Monday (15 October).
British Gas is hiking gas and electricity 6% on average on 16 November, Npower by roughly 9% on 26 November and Scottish Power will raise prices by an average 7% on 3 December.
EDF is yet to announce its plans. Eon is the only company that has pledged not to hike prices, but that only lasts until the end of the year, so it could well follow the others in January.
Am I overpaying?
A typical home on a standard dual fuel tariff currently pays £1,330 (including the SSE hikes, but excluding price rises that haven’t come into force yet), according to energy watchdog Ofgem. Yet switch to a cheap tariff and it can drop to less than £1,100 for the SAME gas, SAME electricity and SAME safety.
But of course switching from a company hiking prices will probably see you move to a company yet to announce price rises, so that's best avoided. However, taking out a fixed tariff is like insurance against rate hikes - although the very top tariffs are changing regularly.
What are the top fixes?
The two top fixes on the market at the moment for average dual fuel users (according to price comparison site Energyhelpline) are Ovo which is the cheapest, and Scottish Power, which is the cheapest without any early exit fees (so if things did change there's no cost to leave). Ovo’s a one-year fix, while Scottish Power lets you lock in for two winters, with no hikes guaranteed until 31 March 2014 and will typically save those on standard tariffs around £200/year.
The cheapest electricity-only fixes are one-year fixes from tiny new firm iSupply, followed by Ovo, but they both have exit fees. EDF’s Blue+ Price promise fixed until 31 May 2014 is the cheapest penalty-free electricity-only fix, so if things get cheaper you can leave.
How do I find the cheapest tariff?
Your exact winner depends on your current tariff, region and usage. So use a Consumer Focus-accredited comparison site (see useful links for how) to find out what comes top for you. Just plug in your details (for fixes, click the 'show only fixed tariffs' tabs).
It’s also worth taking into consideration whether you may be able to get additional cashback too.
What about those on prepayment meters?
Here the market is much less competitive and while it’s still possible to switch, there are no fixes. Therefore as the market is in a state of flux, if you are doing a comparison now, be careful if EDF or Eon come top, as they haven’t yet announced price hikes but are likely to within the next few months.
However, if you're a good budgeter, it is worth looking at whether your current supplier will allow you to move to a credit meter, ie, a pay by bill system - sometimes this can be done free – which, once done, lets you access cheaper tariffs.