Two of the cheapest gas and electrcity deals have just been pulled and the remaining best buys may also end
Householders concerned about record high energy bills over the winter are being urged to switch suppliers now as two of the cheapest deals have just been pulled from the market and the remaining best buys may soon follow suit.
Two weeks before millions of householders are hit by a 9% rise from energy giant SSE, Sainsburys has pulled its market-leading variable rate energy tariff and Scottish Power has stopped offering the cheapest fixed rate deal without exit penalties. Variable rate tariffs let energy companies put prices up or down whenever they like; fixed tariffs set the price for a fixed period, usually a year.
The best deals now come from one company, First Utility. Its online variable rate tariff, iSave v12, will cost a typical household £1,054 a year. This compares with, for instance, £1,274 a year someone who stays on SSE’s standard tariffs and pays by direct debit will be on in a fortnight if they do not switch provider. First Utility’s cheapest fixed rate tariff, iSave Fixed v4, which sets prices until March 2014, costs £1,087.
“Consumers wishing to take advantage of First Utility’s offer should switch now,” said Mark Todd, director of price comparison service Energyhelpline.com. “It’s not clear how long this offer will be around and market predictions show price increases are likely to be imposed by the UK’s leading energy suppliers.”
However, signing up to First Utility does not come without catches. The supplier is charging a £30 per fuel exit penalty for people who sign up to its fixed price tariff then want to leave before March 2014.
Perhaps of more concern, it does not rank highly when it comes to customer satisfaction. According to Which?’s energy companies’ satisfaction survey, First Utility is 11th out of 14 energy companies. Only Scottish Power, NPower and EDF came lower. First Utility got a low customer score of 46% compared with the highest ranked company, Good Energy, which scored 84%. Trust Pilot, a website that collates customer reviews, also gives First Utility what it describes as a “very low” customer satisfaction ranking of 1.5 out of 10.
Experts advise people concerned about bills to opt for the certainty of a fixed rate tariff, especially as price rises from other providers are expected.
“I don’t think there is much chance of avoiding further price rises for much longer,” said Joe Malinowski of theenergyshop.com. “Wholesale prices have been rising and a host of social and environmental factors are putting upward pressure on prices. If energy companies don’t impose increases before the end of the year, prepare for a miserable January when they probably will.”
The next cheapest fixed-rate energy deal after First Utility’s is the New Energy Fix tariff from Ovo Energy, at £1,088 a year. It is not available in Scotland and also comes with £30 per fuel early exit penalties. In Which?’s energy companies’ satisfaction survey, Ovo Energy’s customer score was 76%.
Other energy providers have also been making changes to their deals. E.ON has restructured all its energy tariffs, with half now offering loyalty cash discounts to customers who have been with it for a year or more. The discounts start at £10 and can be taken as money off future bills or as Tesco Clubcard points.
Householders who think they are sitting pretty on cheap deals they signed up to last year should also check prices. According to theenergyshop.com, thousands face gas and electricity price rises of up to 30% as a raft of cheap energy deals come to an end.
Eight popular tariffs from British Gas, E.ON, EDF Energy and Scottish Power that consumers signed up to in the past 18 months are due to expire. The thousands of people who are on those deals will end up on their energy supplier’s standard tariff, resulting in increases of up to £266 a year.
Compare energy prices through the Guardian and Observer’s Money Deals service
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