Yesterday, British Gas announced that it will be increasing its standard variable tariff (SVT) by 5.5%. According to their calculations, this will see the average dual fuel customer pay £60 more per year (£30 for gas and £30 for electricity), with a new estimated cost of £1,161.
The reason they give for this increase is rising wholesale and policy costs – the same reason cited by regulator Ofgem when they increased the prepayment meter cap by more than £57 in April. Citizens Advice, among others, question the justification given for this increase, and call for the Government to put a cap on poor value default tariffs as well.
Luckily, the SVT is no longer available for new customers, so if you're looking to switch to British Gas you won't run the risk of getting onto this higher rate. However, that doesn't mean British Gas, or any of the top six energy suppliers (British Gas, EDF Energy, E.ON, Npower, Scottish Power and SSE), will offer you the best value for money.
Figures from Energyhelpline show that while the average standard variable tariff among the big six suppliers sat at £1134.95 at the end of February, the average among other suppliers was £1047.51. What's more, the cheapest tariff available was £900.89 among the big six and £820.11 when looking at all suppliers. So, if you're currently paying more than average, now might be a great time to look around and see if you can find a better deal.
You don't have to take our word for it; British Gas, in their statement on the rate rise, encouraged all customers to seek out fixed rate deals, as these tend to be the most competitive. The only thing to watch out for is that these deals tend to have a limited term, which means you'll need to switch again at the end or risk being moved to a higher standard rate by default. This may take some time, but could end up saving you lots of money over the long term.
Those coming to the end of a fixed rate term, or currently on a standard variable tariff, would do well to compare gas and electricity suppliers to see if they can find a better deal
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 Any products featured may be withdrawn by their provider or changed at any time.