Gas and Electricity price rises

This last couple of weeks has seen announcements from three of the big six energy suppliers of their price increases. First out of the hatch were Scottish and Southern Energy with an average 8.2% increase in their energy tariffs, this was followed by British Gas announcing an average increase of 9.2% and just yesterday it was npower announcing an increase of 10.4% on average. These price rises won’t stop with these three companies, it will continue until all energy suppliers put their prices up by around 10% before Christmas.

So should you switch?

Maybe, maybe not.. My personal opinion is you should look into fixing your prices for as long as possible. Don’t count on Ed Milliband to come to the rescue if Labour win the next election, chances are he will be limited with what he can do and even then it will be left until about 2017 before any changes take place.

Also be wary of energy company salesmen who say something like “We’re not going to raise our prices”, or even worse “We can offer you xxx”. If you’re going to switch, make an informed choice and don’t be sold (or miss sold) contracts by someone trying to reach their daily targets.

A lot of people don’t know that there was something called the “Retail Market Review” carried out by offgem these last couple of years. And basically, Offgem have been unhappy with the state of the energy market and how people often got sold energy on the basis of certain savings, but later found out those savings didn’t actually pan out. As an example, a salesman would offer a cash incentive of £100 for you to switch energy supplier, but over the year this new supplier would cost you an extra £150 before the credit had been applied, basically still costing you an extra £50. Or you signed into a long term discounted tariff, only for the company to increase their prices, essentially making the discount null and void by comparison with your previous deal.

Gripes like these have now (thankfully) been met with some new rules. However, those new rules don’t kick in until January 2014, so be wary about signing up for a new deal before then.

So what are these new rules?

Basically, energy suppliers cannot offer you a cash incentive. So salesmen cannot offer you £100 to switch any more (masking any true savings). Also, energy suppliers cannot have different ways to calculate their prices, this basically brings back the daily standing charge for your meter. This was because it was almost impossible for the average person to work out the price difference between company A and company B, whereas with a daily standing charge and one price for each kilowatt hour, you can make a direct comparison between suppliers. Suppliers also have to limit the number of tariffs they can offer, this is to stop the confusion that comes with people seeing 5-6 or more tariffs from a single supplier.

If you’ve read this far, I would advise you to fix your prices today! And if you can, fix them for as long as possible. These fixed price tariffs come with a lock in fee. This means if you switch from the company you’re locked in with, they can charge a cancellation fee. However, and this is important… Under new Offgem rules an energy supplier CAN NOT charge you a cancellation fee from moving from one tariff to another tariff. So if you’re with npower and locked into a long term deal that has a cancellation charge, you can transfer to their standard tariff at no charge, then transfer to a new supplier and avoid any cancellation fee in the process.

Currently the best fixed price deal on the market is Blue+Price Freeeeze March 2017 from EDF. This works out more expensive than most of the price rises just announced, but ever so slightly cheaper than the price offered currently by npower. So this means after everyone puts up there prices, the Blue+Price Freeeeze March 2017 tariff should be on a par with most standard tariffs out there, but won’t rise until March 2017. If you don’t have your energy with EDF or you don’t want to switch, there are still some good tariffs out there to freeze your prices with. Strongly consider going on one.

Also consider other factors.. Such as customer service.

On these factors alone I personally avoid companies such as npower, Spark energy and Economy Energy. But I have a lot of kind words to say about the likes of EDF Energy, E-On and Scottish and Southern energy, and yes – British Gas… Though I am kind of biased there, considering I work for them. Though, in all seriousness, British Gas gets far more right than wrong in the energy industry.

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I told my lot to wear wolly jumpers............