Gas and electricity prices have gone up dramatically in the last year after all of the major suppliers announced double-digit price rises for both forms of energy in August last year.
Most lowered the cost of electricity six months later, but not by the amount they increased it by in August.
It will come as no surprise to UK households that all of the companies do not pass on the full lower wholesale costs when they go down.
British Gas profits
British Gas has just announced a 23 per cent increase in profits on its residential UK business of supplying gas and/or electricity to over 15 million households, taking the profit figure up to £345 million in just six months.
However, British Gas has refused to rule out further price increases later this year and has remained mute in the face of criticism that it should cut prices.
Energy prices have doubled in seven years, from an average dual fuel bill of around £650 per household to an average cost of around £1,300.
Centrica own British Gas and earlier this year, its CEO, Phil Bentley warned that prices will continue to rise because of the green energy initiatives imposed by the government, the wholesale cost and the cost of investment to ensure future supplies.
He said: “People will have to pay more per unit [over the next 10 years] and they are therefore going to have to be more diligent in saving energy."
SSE also warned earlier this year that prices will go up in 2012.
E.On is the only one of the “big six” suppliers to say that they will not raise prices for the remainder of this year.
Winter is coming – Prices go up!
Traditionally the summer and early autumn months see price rises announced by the “big six” suppliers, so now is a good time to check out whether you can find a cheaper deal.
With the warnings from two of the “big six” mentioned earlier, it seems likely that most suppliers will increase costs, at least the cost of gas anyway.
And beware, if previous history is anything to go by, once one supplier raises prices, the others follow very quickly!
Phil Bentley is correct in saying that we all need to watch our energy consumption carefully and this is one way that we can reduce costs.
Here are six simple tips that can see you shave off at least ten per cent of your annual utility bill.
- Compare suppliers using this guide and switch to a cheaper deal
- Ensure you pay by direct debit and are signed up for paperless billing
- Turning the thermostat down by just 1 degree will save you £40 annually
- Switch to energy saving light bulbs – they last up to ten times longer
- Turn off appliances at the mains and do not leave on standby
- Insulate your loft, floor and walls
The best dual fuel deals for gas and electricity
Now, more than ever consumers need to look carefully to find the best deal and for ways to save money.
There is some hope. Pressure from consumer groups has meant that most providers have initiated improvements that simplify bills and reduce the number of tariffs making it easier to compare prices and find the best deal.
The advent of some new suppliers who have regularly reached the top of the best-buy tables over the past 18 months such as Ovo, First Utility and The Co-op is providing some options for consumers and adding much needed competition to the energy sector.
However, consumers are still reluctant to switch and all the while the “big six” can rely on customers not switching the incentive for them to improve their products and levels of customer service remains low.
In recent weeks, Scottish Power has gone to the top of the best-buy table with its Energy Fixed November 2013 deal which came in at an annual cost of £1,052 based on a combination of average consumption across all regions.
However, last week, First Utility went one better with its iSave Fixed V3 plan which is fixed until 31st December 2013 and comes in at an average cost of £1,040.
Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "The launch of the cheapest and longest fixed plan on the market from First Utility is great news for consumers. Just two weeks after Scottish Power came out with the lowest fixed price deal, the battle for competitive plans is really hotting up, with First Utility coming out fighting.
"We have continued to see falling wholesale prices. We urge the Big Six to follow the smaller suppliers' lead in offering lower energy tariffs to their customers, and to do it sooner rather than later."
Detailed below are the current best buy plans from all of the main energy firms.
|Supplier||Plan name||Annual Price £|
|First Utility||iSave Fixed V3||1,040|
|Scottish Power||Online Energy Saver 20||1,050|
|Scottish Power||Online Energy Fixed November 2013||1,052|
|EDF Energy||Blue +Price Promise September 2013||1,054|
|Sainsbury's Energy||Online Price Freeze June 2013 (MDD)||1,058|
|Npower||Bill Saver November 2013||1,086|
|OVO Energy||New Energy Fixed||1,088|
|British Gas||Online Variable Aug 2013||1,120|
|SSE||Fixed Discount April 2014||1,140|
Source - Moneysupermarket.com