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Energy prices likely to rise again this winter!

Energy prices likely to rise again this winter!

Category: Utilities

Updated: 01/05/2014
First Published: 23/08/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Last week the Bank of England predicted that energy prices are likely to rise again this winter.

It seems they were right on the money: SSE (the UK's second biggest energy supplier) on Wednesday announced a 9% price hike from 15 October.

And history tells us that when one of the "Big Six" energy suppliers raises prices, it's only a matter of time before the others do the same...

The Bank of England's quarterly inflation report, released on 12 August, revealed that although wholesale gas prices have fallen by roughly 9% since May's report, retail energy prices may still go up towards the end of 2012.

The Bank says that "continuing rises in the other costs that those suppliers face, such as those associated with distribution, are likely to result in small increases in domestic energy prices around the turn of the year."

Many customers will no doubt question how energy suppliers reporting increased profits can justify such rises – particularly given the decrease in wholesale costs. This week, energy supplier E.ON reported that it had more than trebled its profits, and British Gas has recently announced a 23% profit boost too.

So what can you do, in the face of these anticipated price rises?

Fix your energy price to beat increases

Fixed energy tariffs give you a set cost for your gas and electricity over a set period. Luckily, at present three of the four cheapest tariffs are fixed:

Tariff

Average Cost

Average Saving*

Details

First Utility
first:utility

iSave Fixed v3 December 2013

£1,040

£270

  • Fixed until 31.12.13
  • Cancellation penalty: £30 per fuel (so £60 for dual fuel customers) until 31.12.13

Scottish Power
Scottish Power

Online Energy Saver 20

£1,050

£260

  • Guaranteed discount until 31.10.13. Not a fixed tariff.
  • Cancellation penalty: None

Scottish Power
Scottish Power

Online Fixed Price Energy November 2013

£1,052

£258

  • Fixed until 31.10.13
  • Cancellation penalty: None

EDF
EDF

Blue + Price Promise April 2014

£1,058

£252

  • Fixed until 30.4.14 (for two winters!)
  • Cancellation penalty: None

npower
npower

Energy Online Oct 2013

£1,064

£246

  • Rates guaranteed to be 3% cheaper than npower standard until 31.10.13
  • Cancellation penalty: £30 per fuel (so £60 for dual fuel customers) until 31.10.13

Sainsburys energy
Sainsbury's Energy

Online Variable Sep 2013

£1,068

£242

  • 6% discount against Clear & Simple tariff until 29.9.13
  • Cancellation penalty: £30 per fuel (so £60 for dual fuel customers) until 29.9.13

SOURCE: Energyhelpline.com 23.8.12.
* Saving based on average dual fuel tariff costing £1,310 (Source: OFGEM 1 Aug 2012).

Fixed energy tariffs aren't without downsides though. If you want to leave the tariff, before the end of the fixed period, you will sometimes have to pay a penalty to exit. This can also be the case with some of the best online variable tariffs as well. So make sure you check the cancellation penalty before you make your switch.

What you can do if your energy supplier raises prices

E.ON has pledged not to increase its prices in 2012, meaning that customers with this company have some security. However, if its competitors do increase prices, history says that E.ON would be almost certain to do the same early in 2013.

When your energy provider increases its prices, you have the right to reject the price rise – providing you switch to a new energy company. You have to contact your energy provider within 20 working days to inform them of your rejection, and, obviously, you'll also need to arrange a new supplier as well.

What next?

Compare energy prices

More tips

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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