Scottish Power has become the third Big Six energy provider in ten days to announce a price hike, after it revealed it's increasing standard variable gas and electricity prices from 1 June. Dual fuel direct debit customers will see annual bills increase by an average of 5.5%, or £63.
The rise will affect around one-third of Scottish Power customers - 960,000 in total. Those on fixed tariffs or prepay tariffs aren't affected.
Although the majority of Scottish Power' standard tariff customers pay by monthly direct debit, quarterly credit customers which actually see a bigger average bill increase of 6.9%, or £85/yr.
The announcement follows price rise announcements from British Gas and EDF last week. EDF Energy announced that the price of its standard variable electricity tariff will rise by 2.7% in June whilst more than four million British Gas customers will see their gas and electricity prices rise by an average £60 a year from the end of May.
If you're on Scottish Power's standard tariff and will be hit by this price hike, you're likely already overpaying. Check NOW if you can save £100s/yr by doing a full market comparison on our free Cheap Energy Club.
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Martin: 'Do a comparison, find yourself a cheaper deal'
MoneySavingExpert.com founder Martin Lewis said: "Here we go again, another energy company bleating like a sheep. British Gas set the lead and now, knowing they won't get smacked with the same level of publicity whether or not it's justified, we see the rest following along.
"But yet again, what Scottish Power customers and indeed customers of all big six energy companies need to know is that they are ripping themselves off by staying on a standard tariff.
"The do-somethings get better deals than the do-nothings. Someone on typical use could cut bills by around £300 a year with just five minutes work.
"There's no point spitting and swearing about energy companies taking us for a ride if we're getting on the bus.
"Do a comparison, find yourself a cheaper deal - that's the best way to stick two fingers up to them."
I'm a Scottish Power customer - how am I affected?
You're only affected if you're on Scottish Power's standard tariff:
- For those on monthly direct debit... average dual fuel bills will rise by £63 to £1,211/yr, based on typical use - a 5.6% increase.
- For those who pay by quarterly credit... average dual fuel bills will increase by £85 to £1,311/yr, based on typical use - a 6.9% increase.
These estimates are based on typical annual consumption of 3,100kWh electricity and 12,000kWh gas.
This can be broken down into the removal of the dual fuel discount, which was £10.50, a gas price increase of £20.50 and an electricity price increase of £32.
How can I beat the hike?
Everyone affected by the hike can move to a new tariff penalty-free, but you don't need to wait for the price increase to hit - you can act now to save.There are no exit fees for leaving Scottish Power's standard tariff.
The market's cheapest tariff right now is an astonishing £444/yr cheaper than Scottish Power's standard tariff will be post-rise - and even if you don't want to switch provider, you can switch to a cheaper tariff with Scottish Power itself.
Scottish Power's Super Saver May 2019, which is only available through price comparison sites, costs £1,014/yr on average - over £200/yr cheaper than Scottish Power's standard tariff post-rise.
To see if you can save by switching, do a full market comparison on our free Cheap Energy Club.
What is a standard variable tariff?
An SVT is an energy supplier's default tariff. If you've never switched it's likely you're on one, while those on fixed deals are automatically rolled onto this tariff once their fixed-term period expires.
The cost of an SVT is, as the name suggests, variable. So the rate you pay can go up or down depending on wholesale energy costs what suppliers pay for gas and electricity and there are no exit fees or fixed end date.
Conversely, 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. However, these tariffs may have exit fees if you decide to switch before it ends.
The proportion of Scottish Power customers on standard variable tariffs will continue to reduce in 2018, as the provider no longer moves customers onto standard tariffs when their fixed tariff ends. When a fixed tariff ends customers now go on to a basic fixed tariff, priced at an average £1,123/yr for dual fuel customers based on typical use.
What does Scottish Power say?
Scottish Power's CEO retail Neil Clitheroe said: "Unfortunately our standard variable prices are increasing. This reflects rising wholesale energy costs and compulsory non-energy costs.
"Two-thirds of our customers are unaffected. We will be contacting all customers affected by the price change to give them the opportunity to move to a fixed price tariff alternative and avoid this increase."