Millions of British Gas customers will see their bills rise for the second time this year after the firm announced it was pushing up prices again by almost 4%.

On 1 October the price for a typical dual fuel customer on the standard variable tariff will go up by £44/year to £1,205/year on average.

Earlier this year British Gas stopped moving customers whose fixes have ended to the standard variable tariff, and instead started moving them to its new 12-month fixed-term Temporary Tariff. The price of this is also going up for new customers who are moved to it by £44/year on 1 October, to £1,180/year on average.

If you get your gas and electricity from Sainsbury's Energy - a 'white label' of British Gas, so it's the same company using a different brand name - you'll also be hit by the same price rise.

British Gas is the third of the 'big six' energy suppliers to announce two price rises this year, following in the footsteps of E.on and EDF.

Don't wait for the rise - see if you can switch and save £100s/year NOW with our free Cheap Energy Club.

'Don't get angry... switch'

Guy Anker, deputy editor of MoneySavingExpert.com, said: "Millions will rightly be furious with British Gas when they hear of yet another price hike. But its customers need to turn that anger into action.

"For someone with typical use, those on British Gas’s standard tariffs can save £100s a year by ditching and switching, and many firms that are far cheaper have vastly better customer service ratings.

"So the message is plain. If you do nothing you WILL be taken advantage of."

How will my bills change?

Here's how your bills will change:

  • If you're on the SVT – your annual bill will rise on 1 October. The average increase will be £44/year to £1,205/year - up 3.8%.
  • If you're on the Temporary Tariff – your bill won't change under your 12-month fix is up. However the cost of the Temporary Tariff for those moved onto it will rise from 1 October by £44/year on average to £1,180/year - up 3.9%.
  • If you're on a fix - your bill won't change until your fix is up. However if it ends after 1 October you'll be moved onto the new, more expensive Temporary Tariff - again, the average price of this is going up by £44/year to an average £1,180/year.

It's worth noting the above rises also apply to Sainsbury's Energy.

Between three and four million customers are currently on the standard tariff - British Gas says it expects to bring this number down to three million by the end of the year. We've asked British Gas how many are on its Temporary Tariff and will update this story when we hear back.

How can I beat the hike?

There are no exit fees with both British Gas's standard tariff and its Temporary Tariff, so you can ditch and switch penalty-free at any point. And if you're on either tariff you're likely already overpaying by £100s/year, so don't wait for the price hike - act now to save.

If you're currently on British Gas's standard tariff, switching to the cheapest deal on the market at £853/yr could save you upwards of £300/yr, based on typical use.

Use our free Cheap Energy Club to do a full market comparison to find the best deal for you.

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 - those on fixed energy deal are usually automatically rolled onto this tariff once their fix ends, though British Gas customers are now moved onto its Temporary Tariff instead.

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.

What is the Temporary Tariff?

In October 2017, Ofgem introduced new rules letting suppliers roll customers on to new fixed deals, where previously they had to move all customers at the end of fixed-term deals on to a standard variable tariff.

British Gas has its own default tariff, known as the Temporary Tariff, which customers can leave at any point penalty-free. Customers who do not move to a new deal when their existing fixed-term tariff ends will move onto this 12 month fixed-term default tariff.

At the end of the initial 12 months you'll be rolled onto British Gas's current Temporary Tariff offer, unless you decide to switch.

It's a slightly better deal than the SVT, and the price is fixed for around a year, but many could save £100s more by switching provider entirely

Use our free Cheap Energy Club to do a full market comparison to find the best deal for you.

What does British Gas say?

In a statement on its website, British Gas said it was "reluctantly" raising prices due to increasing wholesale costs.

It said: "The reason for this increase is due to an approximately 20% rise in wholesale energy costs since early April, when we last announced an increase in the SVT.

"In response to rapidly rising wholesale energy costs, a number of supply companies have increased their SVT and it has also resulted in Ofgem announcing a second increase to the prepayment meter cap. Until now, we have been able to shield customer bills from the full impact of the increase in the wholesale costs because of the way we buy energy in advance."

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