Massive energy price hikes are back. This is an urgent warning to all gas & electricity customers to consider grabbing a cheap fix before they're pulled.
Today, Scottish & Southern Energy (SSE) has become the first of the big six energy firms to announce a winter price rise, in a bitter blow to millions of households.
The giant is raising gas and electricity prices by an average 9% from 15 October. Anyone with its Atlantic, Scottish Hydro, Southern Electric and Swalec brands will be hit (see the SSE hike news story for more info).
Here are the 10 things everyone needs to know
1. Will others raise prices? Energy firms are like sheep. When one moves, so do the rest, so the other companies are likely to follow. After all, now SSE has taken the bad publicity, it makes it easier for the rest of them. This is supported by the fact the Bank of England has predicted hikes for this winter.
The one exception is Eon, as it has pledged not to raise prices until the end of the year. Though in the past when companies have done that, they normally raise them straight after (SSE's current promise not to hike lasts until October).
2. Do nothing and you'll pay massively over the odds. Millions overpay for energy. A typical home on a standard tariff pays £1,310, yet switch to a cheap tariff and it can drop to £1,040 for the SAME gas, SAME electricity and SAME safety. Only customer service and price changes.
It's worth noting when standard prices have been raised previously, there's a short window before the market's cheapest fixes are pulled, so there may be a very brief period to get this sorted.
3. Fix prices cheaply for TWO winters. The new version of EDF's Blue* tariff is almost the market's cheapest. But it has three killer features it's important not to miss when using comparisons:
A. It's fixed until April 2014, so no price hikes for a long time.
B. Unusually, it has no exit penalties, so if things change, you can leave.
C. It promises to email if anyone launches a tariff £52/year cheaper.
4. Slightly cheaper but shorter fix. The other cheap fix without exit penalties is Scottish Power's Nov '13* fix. It's slightly cheaper for most people than EDF, but the price is only locked in for one winter.
|Average cost/year||Exit fee|
|Standard tariff (i)||£1,310||N/A|
|Scottish Power Fix||£1,050||None|
|First Utility Fix||£1,040||£60|
|For a medium user, using dual fuel, paying by monthly direct debit. Varies by region. Prices don't include cashback (i) Average of big six. Source: Energyhelpline|
5. First Utility's cheapest fix, WITH exit penalties. The cheapest tariff on the market is from First Utility*, which is fixed until December 2013. However, if things change and you want to leave, it has £30 gas & £30 electricity exit penalties.
6. To decide, compare (and get cashback) to find your cheapest. Your exact winner depends on your region and usage. So use a comparison site to check the deals above actually save you money. Plus, use the special links below and if they switch you, after three months, you get cashback or rewards.
Top comparison: Energyhelpline* pays £15 per gas, electricity or dual fuel switch.
Dual fuel: MoneySupermarket* pays £30 cash.
Want wine? uSwitch* gives a mixed crate of six bottles on dual fuel.
See Cheap Gas & Electricity.
7. Is it worth fixing now, even if locked in elsewhere? Normally I say fixes are good if you need surety against price rises, a bit like an insurance policy, that's because normally you pay more to fix compared to the market's cheapest.
Yet counter-logically, right now they're no more expensive and more startlingly, neither EDF nor Scottish Power have exit penalties. So even if things change and prices got cheaper, you could always ditch.
If you're already on a cheap variable tariff that has exit penalties, it's still worth doing a comparison to see if you could save. If the savings are more or even just match your exit penalties (typically £30 gas and £30 electricity, but check), it may be worth it. If fixing isn't for you, the best thing to do now is stick. There's no point comparing when it's likely other energy companies will put prices up, you could just be moving out of the frying pan into the fire. See Is It Time To Fix? help.
8. Got electricity only or moving house? You can still save. If you don't have gas, don't think the rules are different. You can still compare, switch and save (use links above) although cashback's lower. If moving home, you first need to connect to the past occupier's supplier. After, you can switch. Comparison site uSwitch* can estimate your home's usage if you don't know.
9. Prepay meter users can save too. Step 1: A credit meter (where you get bills) is cheaper, so try to convert. Some don't charge. Step 2: If unaffordable, compare and switch prepay provider. MoneySupermarket*, Energyhelpline* and uSwitch* have prepay comparisons. Step 3: When switching, favour companies that convert to bills for free. See Cheap Prepay Energy.
10. Direct debit saves 5%-10% more. If possible, pay by fixed monthly direct debit to get a discount. Do regular meter readings to keep it accurate.
Discuss this MSE news story: Energy hike warning
* Using these links helps the site stay free to use, as they're 'affiliated links' which invisibly take you usually via affiliate linkage or commercial money sites, which then pay this site. You shouldn't notice any difference, the links don't impact the product at all and the editorial line (the things we write) is NEVER impacted by the revenue. If it isn't possible to get an affiliate link for the best product, it is still recommended and still included. The following links moneysupermarket.com, my.edfenergy.com, first-utility.com, energyhelpline.com, www.scottishpower.co.uk and uswitch.com are identical unaffiliated links provided for the sake of transparency. See how this site is financed.
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