The cost of the cheapest annual energy deal has risen by £60 in a week as suppliers withdraw cheap and fixed rate energy deals.
Since last Tuesday, the cost of the cheapest dual fuel energy tariff for the average household has increased from £990 to £1,050 a year, according to Which? Switch, the independent switching site.
The cheapest deal for the average household is now Ovo’s New Energy fixed price tariff which freezes energy prices for 12 months. Which? Switch says it’s unusual for a fixed-rate deal from a smaller supplier to come out cheapest, but this highlights how much prices from the major suppliers have risen recently.
With the cost of energy rising, many consumers have been opting for fixed energy deals, which protect against price hikes, but lock you into a contract for a set period of time – usually a year or two years.
Online discount or variable-price tariffs paid by direct debit generally offer the cheapest rates, but you won’t be protected from price rises during your contract (usually 12 months).
Fixed price deals pulled
This morning Scottish Power withdrew its Online Fixed Price Energy December 2012 tariff. Last week EDF pulled its Fixed Saver v2 plan which allowed customers to fix prices until September 2012.
Which? energy policy adviser James Tallack says ‘Despite the withdrawal of these popular products, consumers looking for a fixed-price tariff shouldn’t despair.
‘Scottish Power and Npower are currently offering fixes at similar prices to their best online variable-price tariffs. EDF Energy’s new fix is similarly competitive, while Ovo also represents a good deal at the moment.
‘Although fixed-price tariffs offer some certainty over energy prices, bear in mind that you won’t benefit if prices come down elsewhere, nor will you be able to get out of your contract without paying a hefty exit fee.’
Rising energy costs
All of the major energy suppliers have announced price increases in recent months.
British Gas, Eon, EDF, Scottish Energy, Npower and Scottish and Southern Energy have all increased their gas prices between 15% and 19% and electricity prices between 5% and 16%.
James Tallack added: ‘Most consumers who don’t pay by direct debit or manage their accounts online continue to suffer from poor choice and high prices. Tariff structures are baffling and rigged against lower users, bills are approaching record levels, and it’s far from clear whether the price we pay is a fair reflection of the underlying cost of energy.
‘With energy ranking as consumers’ number one financial concern, it’s essential that industry regulator Ofgem takes all of these issues into account as it conducts its current review of the market.’
Join the Which? energy campaign
Which? is campaigning for energy tariffs to be simplified so everyone pays a fairer price for their energy and can compare the cost between companies quickly and easily.