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The gas and electricity
market is constantly evolving and that is why we have
created this monthly ‘what’s new’
feature to keep you abreast of the latest developments.
If you’re in the
market for a new gas and electricity tariff and want
to know about the latest deals then check out our price
indicator which is updated as soon as a new product
is released. Alternatively, head over to our gas and
electricity comparison tool. and compare tariffs in
your area based on your consumption levels.
Here are this month’s
top stories:
Energy bosses warn of
potential 40% price increases
Prepayment customers lose out on £769.6 million
Energy bosses warn of potential 40% price increases
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Wholesale gas prices have hit record highs, breaching
the £1 per therm barrier for the first time ever.
This has led to warnings from energy bosses that prices
will increase ‘significantly’ before the
end of the year.
It is estimated that it
may be necessary to increase prices by around 30-40%
if energy companies are to maintain their profits. Further
price increases will be a blow to British households
as gas and electricity prices have already risen by
around 15% this year. The average household currently
pays £1049.47 per year for gas and electricity
compared to £850.08 only 12 months ago.
The majority of UK households
are still on standard tariffs and are being urged to
switch to a cheaper tariff. Online tariffs offer the
best value for money, and at the time of writing, British
Gas had the cheapest deal in most circumstances. Its
Click Energy 5 tariff will cost the average household
£845.10 a year. Moneysupermarket.com’s comparison
tool. enables you to identify the cheapest tariff for
your circumstances, based on your consumption and where
you live.
Some experts are also suggesting
that it might be the right time to move to a fixed energy
tariff as this will protect you from further price increases.
The cheapest fixed price deal is currently Scottish
Power's Fixed Price Energy 2009 with an average annual
price of £1021.26. However, a £50 cancellation
fee is levied if you switch to a different product or
provider within the fixed term.
With fixed energy deals
being so much more expensive than the cheapest online
products, it is not clear cut as to whether consumers
will be better off opting for the security of a fixed
tariff. If you are worried that gas and electricity
prices may continue rising, fixing now will at least
give you peace of mind.
Prepayment customers lose
out on £769.6 million
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According to research by moneysupermarket.com, prepayment
customers are paying significantly over the odds for
their gas and electricity.
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A prepayment customer on
a standard tariff pays £1,048 a year for their
gas and electricity – that’s £153
more expensive than the ‘best’ average tariff
available from the energy giants. For example, a British
Gas prepayment customer would pay an average of £1,143.59
a year compared to £845.10 on the company’s
market-leading online tariff, Click Energy 5. That’s
a difference of £248.59. British Gas has recently
launched an online tariff for prepayment customers –
Click Pay As You Go Energy – but at £1,073
it’s still significantly more expensive than the
Click Energy 5 product. With five million customers
on prepayment meters across the energy providers, they
are collectively missing out on £769.6 million
a year in savings.
Often it is the poorest
households that have pre-payment meters and a rising
number are struggling to cope with escalating bills
- 14% of gas customers and 9% of electricity customers
have gone without heating and power because they cannot
afford the payments.
The Government should put
forward proposals to treat prepayment customers fairly.
We believe that energy providers should also reduce
prices for prepayment customers, remove back charges
and shield them from further price hikes.
However, for now, the advice
for prepayment customers is speak to your energy supplier
as soon as possible. Ask to be moved onto a social tariff
or credit meter and enquire as to whether or not there
are any other discounts you may be eligible for.
