British Gas is the latest of the big six energy suppliers to announce price hikes, so this is an urgent warning from Money Saving Expert Martin Lewis that there’s a window of opportunity for you to beat them and prevent any impact on your bills NOW.
From 23 November British Gas customers on a variable tariff will be hit by an average price rise of 9.2% – up 10.4% for electricity and up 8.4% for gas.
Meanwhile Scottish and Southern Energy (SSE) will hike both gas and electricity prices for variable customers by an average 8.2% from 15 November (includes Atlantic, Scottish Hydro, Southern Electric, Swalec and M&S).
The problem is energy companies' herd mentality means gas and electricity price hike season has almost certainly kicked off and the rest of the big four providers are almost certain to follow suit.
Should I switch?
Contrary to what you’ll hear many shout – now isn’t the moment to simply use a comparison site and switch to the cheapest provider – as that’ll be a variable tariff - so you risk moving out of the frying pan and into the fire, possibly shifting to a firm that puts its prices up even more. If that’s your plan, best hold until all of them have announced their rises.
However, there is a chance to lock in your current price or even cheaper by fixing for up to four winters and guaranteeing yourself no price hikes.
The average dual fuel user on a standard tariff pays £1,420 according to Ofgem, so I’ve used that as my benchmark below. This isn’t all about price though, bias yourself towards tariffs with no exit fees so you have the freedom to leave if things don't go as predicted. Below are my top picks, but go quick as they might not be around for long:
Longest fixes (no exit penalties): Both EDF Blue+Price Freeeeze and Npower Price Protector are fixed until March 2017 and cost about £1,340 a year, so you get no hikes for four winters.
Cheapest no-exit penalty fix: Npower’s Online Price Fix is fixed until 30 November 2014 at £1,180/year.
Cheapest fix: First Utility’s iSave v9 is fixed longer, until April 2015, at a slightly cheaper £1,170/year. But it carries up to £60 in exit penalties.
All of these fixes are portable (check if others are), so you can take your fix with you if you move.
But is it worth fixing?
Only a crystal ball will show you whether this is right or wrong – though if it only costs a little more, with prices going up, savings are likely. Overall though you need to decide based on your attitude to future hikes. The more that big price rise would hurt, the more seriously you should consider fixing.
OK, so do I just switch to one of those?
Who’s your winner and how much you can save depends on your usage and region. Don’t just rely on the tariffs above - you should do a comparison using an Ofgem Confidence Code comparison site - they list in price order though, so you’ll need to search for the fixes, especially the longer ones. To see your exact prices and savings for the top pick fixes above, use my special Cheap Energy Club comparison link and switching tool.
If you're not online, use a comparison with a phone service, such as Energyhelpline on 0800 074 0745 or uSwitch on 0800 051 5493.
Doesn’t fixing involve changing providers? I don’t like change.
The comparison may show your current provider offers the cheapest fixed tariff. If not, switching really isn’t usually a big deal. You keep the same gas, electricity and pipes. Only service and, crucially, cost changes. Yet it will take two months to switch across, which is why doing it now before big winter bills is so crucial. These days, switching is pretty simple, but, of course, for some there can be hassles.
I’ve heard some people switch to a cheaper price but have a bigger direct debit.
Direct debits are based on an estimate of your usage. Some find they switch to a cheaper tariff, but their direct debit rises. This is usually because the new firm over-estimates, or the old one under-estimates. If it's too high and means you overpay, you'll get the money back later. If it's a problem, you've a right to ask them to lower it.
I’ve heard some people are paid a lump sum when they switch. Will I get one?
If you're in credit when you switch, your old provider needs to give you cash (put it aside, winter's coming, so usage is higher). If you’re in debt when you switch, if you're on prepay, you can switch if the debt's £500 or less. If you're on a credit meter, it varies by supplier and payment method. British Gas and Scottish Power told us you'd need to pay off the debt before switching away. The other big six suppliers may let you switch then pay it off.
I’m on a prepaid meter, can I switch?
While some of the more competitive deals and fixes aren't available, it's still possible to switch and save up to £70 a year. Though you may want to wait until there’s a level playing field and all the big six have announced. Use a comparison site to find your best.