Npower price warning: tens of thousands to see costs rise

Some will see the price they pay rise by almost 25%, while the energy giant freely admits anyone affected should switch.

The news comes after all the big six energy firms, including Npower, cut gas prices earlier this year by up to 9% (see the Cheap Gas & Electricity guide).

Who is affected?

Anyone on Npower's Sign Online tariffs 8-14 will see prices rise from 7 May as they will be moved to the company's standard direct debit prices, rather than the current discounted rates.

Price comparison site Gocompare.com says some customers on the Sign Online 14 deal will see a 24% rise in energy costs. This means a family paying £1,000 a year would soon pay £1,240.

Why are prices rising?

Npower says its hand has been forced by energy regulator Ofgem following new rules which mean firms' prices must reflect the cost of supplying that energy. Npower says it cannot run cheap deals indefinitely or it would be breaking regulations.

However, Ofgem says its rules were never meant to end what it calls "innovative deals", only to prevent high charges for pre-payment meters.

What should you do, if affected?

An Npower spokesman says: "If you're affected, go online and get yourself the best possible deal, which is what people are doing."

Npower customers whose bills will rise, or anyone else who has not switched energy supplier recently, should indeed check if they can find a better deal.

Households can sometimes cut their bills by hundreds by doing a comparison of the tariffs available and switching (see the Compare Gas & Electricity and Get Cashback guide).

Those languishing on their supplier's standard tariff or who get bills through the post are almost certainly paying too much. For instance, the cheapest online deals for typical users are less than £900 a year, whereas those on a standard tariff who get bills by post typically pay around £1,200.

When switching, don't believe the hype from the major firms who often claim they have the cheapest prices.

The energy market is complicated so determining which is the cheapest provider for you depends on where you live and how much power you use.

Further reading/Key links

Slash energy costs: Cheap Gas & Electricity Your rights: Fight Energy Direct Debits Capped tariff help: Is your Cap/Fix ending soon? Boiler protection: Boiler Cover