Npower has announced huge price rises for 1.4 million customers on its standard variable tariff from March, with a typical dual-fuel household's energy bill set to soar by about 10%.
After EDF it is the second of the big six energy firms to announce a spring price hike, with the others expected to follow.
And with cheap fixes likely to disappear soon, if you're one of the 66% of the population already almost certainly overpaying on a standard tariff, check NOW if you can lock in a cheap deal before the hikes bite. You can do a comparison to find your cheapest deal using our Cheap Energy Club.
MoneySavingExpert.com founder Martin Lewis says: "This is the second of the big six to announce price hikes. They're not clinging together as tightly as they normally do, doing it one after the other.
"But almost certainly by the end of April we will have seen all the big six firms having hoicked their prices by between 5% and 10%. And as always, it's worth remembering that these hikes hit people on standard tariffs. That's the vast majority of people – and they're already overpaying by typically £200 a year.
"Do not groan, moan or whinge. Take action. Everybody with every firm, should make sure they're on the cheapest tariff. The best thing to do is a whole-of-market comparison, but even if you're not willing to do that, call up your existing company and say 'Am I on your cheapest deal?' Most people aren't, and hundreds can be saved just by one phone call."
How prices are changing
The increase comes into effect on Thursday 16 March, though if you're identified by Npower as a "vulnerable customer", it will hit in May.
Those with prepayment meters are unaffected for the time being, however an Ofgem-sanctioned prepayment freeze, which comes into operation in a few weeks, will result in some customers seeing a reduction and others a rise.
Here's the detail of the price cuts and rises happening on 16 March (unless you're a vulnerable customer):
- Gas prices for those on a standard tariff will rise by an average 4.8% from 16 March.
- Electricity prices for those on a standard tariff will increase by an average 15% from 16 March. This will hammer those who heat their home by electricity.
- A typical dual-fuel (ie, gas and elec) household which pays by direct debit will see its annual bill rise from around £1,077 to £1,187 – a rise of about 10%.
Npower blames its decision on the rising price of energy it pays on the wholesale market and the expense of participating in Government schemes such as smart metering and investing in renewables.
Who counts as a vulnerable customer?
Npower has told us that vulnerable customers could be "anyone with ill health or who has struggled to pay their bill" and says it has a record of such customers. If you believe you should benefit from this scheme you can contact Npower and ask it to register you as a vulnerable customer.
What does Npower say?
Simon Stacey, Npower's managing director domestic markets, says: "This is a hugely difficult decision, and we've delayed the date this takes effect until after the coldest months of the year. We've also made sure that our most vulnerable customers won't see any impact until May.
"Npower has some of the most engaged customers of any major supplier – one million of our customers switched to another of our tariffs last year and around half of our customers aren't on a standard variable tariff (SVT). To encourage even more engagement, today we're launching a fixed tariff just for our existing customers who are still on an SVT, that will fix energy prices for the next four years with no exit fees.
"Npower operates one of the broadest ranges of support schemes of any supplier, offering the widest and most diverse care programmes for vulnerable customers and those who are struggling with their energy bills. We're already delaying the impact of the increase for vulnerable customers, but anyone who is struggling with their energy bills should contact us straightaway to discuss whether they're on the right tariff for their needs, energy saving help and bespoke payment plans."