Co-op Energy has become the first big-name supplier to scrap its standard variable tariff for customers on a fixed deal – but most could still save by switching.
Co-op Energy no longer moves customers onto its Green Pioneer standard variable tariff (SVT) when their fixed-price tariff ends. Instead it moves them onto a new fixed tariff, which runs until May 2019 but has no exit fees.
The new fix is almost £100/year cheaper than Co-op Energy's SVT, but is still £251/year more expensive than the cheapest deal on the market, based on typical use.
The change only applies to customers whose fixed deal has ended since 31 December – if you're currently on Co-op Energy's SVT you won't automatically be moved to this new tariff.
Co-op Energy is the first big-name supplier to scrap its SVT for customers whose fix is ending, but other energy companies have also announced plans to do the same.
Npower announced last month that it was trialling an end to its SVT while last year British Gas announced its plans to end its SVT, E.on revealed it's to scrap SVTs for those with a smart meter or on a fixed deal which ends, and Scottish Power has also said it plans to get rid of standard tariffs this year.
The changes follow the Government's pledge to give regulator Ofgem the power to bring in an absolute price cap on SVTs.
What is a fixed-price tariff?
A fixed-price tariff essentially means the unit price you agree to pay for your energy is set for a certain period such as one or two years, meaning it won't increase for the duration of the fix, but it may have exit fees if you decide to switch before it ends.
Conversely, SVT costs are variable so the rate you pay can change – but there are no exit fees or fixed end date. SVTs are energy suppliers' default tariffs and are nearly always the most expensive. If you've never switched or your fixed deal is over, it's likely you're on one of these.
How does the new Co-op Energy fix stack up?
The Co-op Fixed Green Energy May 19 v2 tariff will cost £1,058/yr on average, compared with £1,157/yr for its SVT, based on typical use.
Although this is a better deal, and is fixed for more than a year, many could save by switching provider entirely. If you didn't want to switch provider you could switch to Co-op Energy's cheapest tariff, My Co-op Lite Online March 19, which is currently £999/yr for the typical user – although this tariff does come with exit fees.
Neither Co-op Energy's SVT nor its replacement fix has exit fees, so you can ditch and switch penalty-free. Use our free Cheap Energy Club to do a full market comparison to find the best deal for you.
Here's how the prices compare:
How the tariffs compare (i)
|Fixed Green Energy May 19 v2||£1,058|
|Co-op Green Pioneer (standard variable tariff)||£1,157|
|Cheapest on the market (variable)||£807|
|Cheapest fix on the market||£816|
|(i) This table is based on Ofgem's typical usage figures.|
What does Co-op Energy say?
A Co-op Energy spokesperson said: "We write to everyone approaching the end of their fixed tariff at least three times before it expires to encourage them to switch to our best-priced tariff.
"From 31 December last year, all customers who do not switch to an alternative tariff when their fixed tariff ends are automatically moved onto our new Co-op Fixed Green Energy May 19 v2 fixed-price default tariff, rather than our standard variable rate.
"This ensures that customers who have chosen a fixed tariff in the past get the peace of mind that the price they pay on their new tariff will currently be fixed until May 2019."