As the latest round of gas and electricity price rises take effect we ask if now could be the best time to sign up for a new tariff.
Britain’s households finally have something to cheer following a string of price rises from the UK’s big six energy suppliers.
British Gas has just announced a price reduction on its web-only tariff, making it the cheapest way for the average household to get their gas and electricity.
This cut is the first piece of good news for energy customers in months. Suppliers have hiked prices by up to 9 per cent and at the start of March, the last announced hike by EDF Energy, will come into effect.
But the combination of this new deal and the fact that all energy prices appear now to be on a level playing field, makes it the right time to compare energy suppliers.
A new online deal
British Gas’s new web-only deal that undercuts its rivals and makes it the cheapest supplier on the market.
The firm’s Websaver 11 tariff will cut annual gas and electricity bills for the average family to £895 – that’s £11 cheaper than the nearest competitor, E.ON’s SaveOnline 5, at a typical £906 a year.
Websaver 11 is only available to new customers, so you won’t be able to benefit if you’re on one of British Gas’s existing Websaver deals.
As with other deals of this type, admin is carried out online, so you’ll get bills by email rather than post, for example.
Lisa Greenfield, energy analyst at Confused.com, says: “Shopping around for a new deal and voting with their feet is the best weapon consumers have in the fight against escalating costs.
“Online tariffs continue to provide better deals so those who haven't reviewed their provider recently may find now is an appropriate time to consider making the switch.”
Price rises: how you’ve been affected
British Gas’s tariff cut comes on the back of increases to all the big six’s standard tariffs – these are the rates the majority of customers pay, and do not require online management.
The first firm to announce price increases this winter was Scottish Power, on 25 November. Its customers saw the cost of gas go up by around 2 per cent and electricity 9 per cent.
Scottish & Southern Energy raised prices for both fuels by an average of 9 per cent on 1 December, followed by British Gas on 10 December with a typical 7 per cent rise.
On 4 January, npower upped gas and electricity bills by 5 per cent, and a month later E.ON imposed a rise of 9 per cent in the cost of electricity and a 3 per cent in gas.
Finally EDF, which had said it would freeze its tariffs until at least 1 March, has announced its standard prices will rise by an average of 6.5 per cent for gas, and 7.5 per cent for electricity from 2 March.
On the face of it, you might think you’d be better off moving to npower or Scottish Power given their relatively low increases. But the energy market doesn’t necessarily work like that: which tariff is best for you depends also on where you live, and how much of each type of energy you use.
That’s why you should compare gas and electricity prices which can take your current bills and usage, as well as your location, into account when helping you to work out how much you can save by moving to a rival.
Should you fix your tariff?
EDF has become the latest provider to offer new fixed-rate gas and electricity tariffs – it has a range of deals, with rates guaranteed not to rise before 2012, 2013 or 2015.
If you switch to a fixed deal now, you will pay more than on a standard tariff – and the longer your rate is fixed for, the bigger the premium you will face.
But you have the peace of mind of knowing that, should standard rates rise, your bills will remain the same.
Greenfield says: “Ultimately, fixed-rate tariffs offer price security, and those who want the security of knowing what their payments will be each month, may decide that choosing a fixed tariff now is a better option than taking the gambling of waiting.”
Greenfield adds that consumers could also consider a capped deal – this protects against price rises past a certain point, but means customers will also benefit from any price falls.
“Customers need to remember that both standard fixed and capped tariffs do come at a premium in return for the security they offer,” she says.
