The cost of energy has been the most controversial subject in personal finance over the last month.
This week is Big Energy Saving Week and Myfinances.co.uk has compiled this latest feature to show you the cheapest fixed rate energy deals on offer from the main suppliers that allow you to fix your energy prices for two winters or for the longest period available if a company does not have a fixed rate deal for two winters.
Customers have lost out on the best fixed rate energy deals from EDF Energy, Npower and Scottish Power that were available a month ago as these have been pulled and replaced with more expensive fixed rate deals.
No surprise that the price rises have coincided with the annual round of energy price hikes that comes as the leaves begin to change colour in the autumn and households across the UK start using more gas.
Five of the “big six” suppliers have raised the cost of gas and electricity recently. SSE started the price rises this autumn announcing gas and electricity price rises of nine per cent. British Gas followed with six per cent hikes and then npower and Scottish Power followed with increases averaging almost nine per cent for both fuels from both suppliers.
EDF Energy became the fifth supplier to rise prices when it announced 10.2 gas and electricity price increases to apply from December 7th. It also cut uts Blue + Price Promise May 2014 fixed rate energy tariff and replaced it with a more expensive tariff that fixes energy prices until March 2015. The details of thi stariff are in our table below.
E.On have not raised prices so far. E.On has said that it will not increase prices in 2012.
Following these announcements Myfinances.co.uk published a feature on the best variable rate energy deals for winter 2012. Variable rate deals offer customers flexibility and the opportunity to take advantage of any price decreases announced by energy suppliers.
However, history tells us that price decreases are unlikely to happen as pressure from the government, the regulator, Ofgem and consumer groups such as Which? has had little impact in the past on energy companies dropping prices.
General advice on finding the best deal
You need to choose an online tariff and pay by direct debit and you need to provide your own meter reading and select paperless billing. This will, as a rule, entitle you to qualify for all of the discounts and the cheapest tariffs available from each of the energy suppliers.
The number of tariffs is falling, partly because of recommendations from Ofgem. Some companies have more tariffs than others which can make selecting the best tariff for you something of a minefield and very confusing. It tends to be the smaller suppliers who have the simple straightforward tariffs and once you compare prices based on your own usage, they are often the cheapest.
Last week Ofgem launched new campaign that aims to get suppliers to cut the number of tariffs and provide clearer information to consumers to enable them to find the cheapest tariff. Ofgem called for each firm to have a maximum of four tariffs for each fuel and for discounts to be allowed if a customer takes both fuels from the same company but would apply for the same rate for all tariffs from the same company and for obsolete tariffs to be deleted and for customers to be automatically switched to a cheaper tariff.
Ofgem’s recommendations followed the Prime Minister, David Cameron’s intervention in parliament last week when he said that the government would force suppliers to put customers onto the cheapest tariffs. The government appeared to backtrack from this statement after being criticized by consumer groups who were concerned that such a proposal would stifle competition and ultimately prove to be bad for consumers.
Gillian Guy, chief executive of Citizens Advice, said: "Ofgem and the government have massive questions to answer. It really does need an overhaul of the market, and not just putting a lid on it. Government has a responsibilty to look into competition in the energy market, to see how to get the structure right.
"We'd like some clarity from the government on what it is doing. What worried us is that the government's recent messages sound like a promise that everything will be okay and that this situation will be sorted out for people.
"That's counter to our message which is that people have to sort things out for themselves. I don't want people to relax. It's not going to be all right, winter is upon us and people need to take action now."
Older customers with no internet access
It may seem unfair that elderly people with no internet access are effectively penalised by not being able to access the cheapest tariffs. However, you can get round this. If you are a young person with a Nan or Grandad in this situation, then offer to help them by going online for them. If you are an older person, ask your children or any nieces and nephews you have to do this for you. You will save money!
You can use uSwitch to help you find a better deal. If you call them on 0800 093 0607 and give them details of your current tariff they can advice you of the best one for you.
Alternatively, send them a copy of your latest energy bill to ‘Freepost uSwitch’ with your phone number and they will call you back.
The “big six” energy suppliers have justified their price rises by saying that the wholesale cost of gas and electricity has risen and through the obligations the government has put on them to secure future gas supplies and the costs of maintaining the National Grid and offering clean environmentally friendly fuel mean we have to pay more.
So, if prices are likely to continue to rise, an increasing number of analysts and consumer groups are advising customers to switch to a fixed rate energy deal.
Fixed rate deals
In this feature we are going to look at the best options from each of the “big six” suppliers to fix your prices for the next two winters, until at least the spring of 2014. The “big six” suppliers are British Gas, Npower, EDF Energy E.On, SSE and Scottish Power. We will also look at the best options from three other suppliers worth considering; Ovo Energy, First Utility and the Co-operative.
Fixed rate energy deals allow you to be certain of the price you will pay for a specific period. This means if the energy company you use hikes its standard rates, you will not be affected for the duration of the fixed rate contract length you have signed up for.
Signing up to a fixed rate energy tariff means that you are likely to pay a slight premium on the best variable rate deals on the market. This is the price you pay for the certainty of knowing what you will pay and not being subject to price increases for the length of your fixed rate energy deal.
After the actual cost of usage, another factor that can influence which is the best energy deal for you is whether the fixed rate deal you sign up for has any exit penalties.
If it doesn’t it means you are free to switch without paying a fee, allowing you to take advantage of a better deal if one comes along.
Consumer group reaction
Audrey Gallacher, Director of energy at Consumer Focus, was disappointed with the timing of the energy price increases from British Gas and Npower.
She said: "Two price hikes on the same day will just reinforce the views and prejudices of consumers - whether justified or not - about a lack of transparency and competitiveness in the market.
Scott Byron of comparison website moneysupermarket.com said: “As a customer, I would be looking at Scottish Power’s Online Fixed Price deal until April 2014 or the EDF Blue Price Promise, fixed until May 2014. They both allow you to fix your energy prices for the next two winters but have no termination fee if circumstances change and you want to go elsewhere.”
For more details on Big Energy Saving Week check out this website energysavingtrust.org.uk.
Our table below puts in my own annual usage to work out the real costs for a user. The tariffs from the big six are products that are fixed for a certain length of time. The products from the Co-op and First Utility are not fixed and could be subject to price rises but could also work out cheaper and certainly will if these companies don’t raise their prices, though the likelihood is that they will have to. The Ovo deal is fixed for 12 months.
|Company||Tariff||Fuel||Daily standing charge||Annual s/c cost £||Unit rate (P) inc VAT per KWH||Annualusagekwh||Annualusagecost£||Discounts£||Totalcost£ inc VAT|
|Ovo||Fix for 12 months||Gas||£7pm||£84||3.60||18611||£670.00||N/A|
|Ovo||Fix for 12 months||Electricity||£7pm||£84||9.69||4232||£410.08||N/A||1248.08|
|Scottish Power||Online Fixed Price Energy April 2014||Gas||N/A||N/A||1st 670 = 7.796 rest = 3.459||18611||£759.97||N/A|
|Scottish Power||Online Fixed Price Energy April 2014||Electricity||N/A||N/A||1st 225 = 21.621rest=11.67||4232||£583.40||N/A||1343.37|
|Co-op||Single variable rate tariff||Gas||N/A||£64.26||3.90||18611||£725.83||N/A|
|Co-op||Single variable rate tariff||Electricity||N/A||£64.26||12.02||4232||£508.69||N/A||1363.04|
|EDF||Blue + Price Promise March 2015||Gas||26.25||95.81||4.244||18611||£789.85||N/A|
|EDF||Blue + Price Promise March 2015||Electricity||18.90||68.98||14.36||4232||£607.71||N/A||1563.35|
|SSE||Fixed Discount December 2014||Gas||16.443||60.02||4.263||18611||£793.38||£6 paperlessbill|
|SSE||Fixed Discount December 2014||Electricity||16.443||60.02||4232||£542.12||£6 paperlessbill||1443.74|
|E.On||Energy Fixed 2 Year V1||Gas||39.438||143.95||3.834||18611||£713.54||N/A|
|E.On||Energy Fixed 2 Year V1||Electricity||33.054||120.65||11.907||4232||£503.90||N/A||1462.04|
|British Gas||Fix and Fall March 2014||Gas||25.171||91.87||4.561||18611||£848.85||N/A|
|British Gas||Fix and Fall March 2014||Electricity||16.458||60.07||13.058||4232||£552.61||N/A||1553.40|
|Npower||Price Protector March 2014||Gas||N/A||179.75||3.799||18611||£707.03||N/A|
|Npower||Price Protector March 2014||Electricity||N/A||37.18||15.803||4232||£668.78||N/A||1592.74|