Scottish Power has become the latest big six energy firm to hike prices, with its dual-fuel standard tariff to rise by an average of 7.8% from 31 March. But British Gas has announced it's freezing its standard tariff prices until 1 August.
About 1.1 million Scottish Power customers will be affected by its changes, with electricity prices to increase by an average of 10.8% and gas prices by an average of 4.7%.
Today's announcements follow Npower's decision to raise prices for 1.4 million customers from March, while EDF cut gas prices by 5.2% in January but will hike electricity prices by 8.4% on Wednesday 1 March.
'Millions facing above-inflation increases'
MoneySavingExpert.com founder Martin Lewis says: "Undoubtedly the price pressure is upward right now due to the increase in wholesale prices, the weakness of the pound and the added burden of smart meters. But that's cold comfort for the millions of people facing massive above-inflation increases in their gas and electricity bill.
"With Scottish Power joining Npower and EDF, it's now very clear the rest of the big six will follow suit at some point. The British Gas sticking plaster of a freeze is good news as it does provide some temporary respite, though again, unless there are major shifts in the world market it is virtually unthinkable that a rise won't happen eventually.
"The most important message for all customers, including those with British Gas, is if you are on your company's standard tariff, you are massively overpaying.
"For those with companies who've announced price hikes, after those hikes you will be overpaying on average by £311 or more than the cheapest deals on the market for the same gas, same electricity and same safety. Not only that, those cheapest deals are fixed rates so you're guaranteed not to face price hikes for at least a year.
"Even with British Gas, it's important to remember the price you're being frozen on is its already expensive standard tariff. If you are willing to switch elsewhere with typical use you can save £210 a year with the cheapest deal on the market."
How Scottish Power's hiking prices
Scottish Power's blamed its price increase on rising wholesale energy costs plus the cost of schemes such as smart metering and green initiatives. Here's the detail of what's changing as of Friday 31 March:
- Gas prices for those on a standard tariff will rise by an average of 4.7%.
- Electricity prices for those on a standard tariff will increase by an average of 10.8%.
- If you're on a dual-fuel standard tariff, you'll see an average increase of 7.8%. For a typical dual-fuel household paying by direct debit that'll be an extra £86 a year, with the average annual bill rising from £1,161 to £1,247.
- Prepay customers on a standard tariff WON'T face any price hike for the time being – but Scottish Power hasn't ruled out changes to prices ahead of the introduction of an industry prepay price cap on Saturday 1 April.
Scottish Power says it'll write to customers on its standard tariff with a personalised quote, showing what they could save by switching to one of the firm's fixed deals. Yet remember if you're on its standard tariff you can almost certainly save much more by comparing prices from other firms via Cheap Energy Club.
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British Gas freezes prices – but most can still save by switching
British Gas has announced today it's extending its current standard tariff price freeze until 1 August. This freeze also applies for customers on the standard tariff offered by Sainsbury's Energy (which is operated by British Gas).
However the extension of the freeze DOESN'T apply to prepayment customers, who'll see their freeze end in April to coincide with the introduction of the industry prepay cap. British Gas wouldn't confirm whether prepayment customers could expect a rise or fall in their bills, but says it'll write to them nearer the time.
Mark Hodges, chief executive of Centrica Consumer, which owns British Gas, says: "We're pleased to give our customers on standard tariffs the peace of mind that the price they're paying will remain unchanged until August... In December we promised to take tangible action to improve how the energy market works for all our customers. That effort continues."
Even though British Gas has frozen its prices, don't be lulled into a false sense of security. If you're one of the 6.6 million on a British Gas standard tariff, it's likely you're paying well over the odds for your energy. Check if you can save using Cheap Energy Club.
Martin says: "It's also worth remembering British Gas operates Sainsbury's Energy, which is just British Gas under a different name.
"Often Sainsbury's Energy substantially undercuts British Gas's main price – it doesn't right now, but if British Gas customers switch across to it, it will pay them £100 in vouchers for doing so. So you'll get exactly the same as you're on, the price freeze still applies and you make 100 quid."
Additional reporting by Callum Brodie and Andrew Capstick.