Don’t be caught cold by big rise in energy costs
FOOD FOR THOUGHT: The cost of cooking and heating your home is about to soar for British consumers CONSUMERS are being urged to protect themselves against the latest round of gas and electricity price increases.
SSE, British Gas and npower have announced rises in the cost of energy to come into effect over the next six weeks.
Rival providers EDF, E. on and Scottish Power are all expected to follow suit in the near future.
But experts say customers who want to protect against these and future price rises should consider switching to a fixed- rate energy deal as soon as possible as these tariffs guarantee users won’t face hikes in the unit price of gas and electricity for a pre- agreed period.
There is a catch, though, as such deals usually start off more expensive than standard, variable ones. The idea is that customers benefit over time as standard tariffs become dearer.
If standard tariffs fall, however, those on fixed rates could lose out but the trend in energy prices is widely expected to be upwards.
Kate Rose, head of energy at Confused. com, said: “With more rises likely over the coming weeks, it really is vital that consumers act quickly to ensure they protect themselves from increasing bills.
“Opting for a fixed- price tariff is a great way to do this and there are many competitive deals.
“If previous years are anything to go by, though, suppliers may start to pull them over the coming weeks, making it more important consumers act quickly.”
EDF and Scottish Power are currently offering deals which fix gas and electricity prices until 2017. A number of suppliers have fixed deals that end in 2015.
Ann Robinson at uSwitch. com added: “If you want to protect yourself, the time for action is now. There are some great fixed- price deals which can protect you from hikes for up to four winters.”
At the start of this week, npower said it would be raising average prices for its electricity and gas by 9.3 per cent and 11.1 per cent respectively from December 1.
This followed news that British Gas customers would see bills rise by just more than 9 per cent on average from November 23, while SSE’s prices will go up by 8.2 per cent on November 15.
Mark Todd at energyhelpline explained that npower customers who receive both electricity and gas from the firm would see typical annual bills rise by £ 139 to £ 1,491.
He added: “At the same time npower has pulled two of its best value fixes, showing customers really need to act now if they want to switch to a low- cost, fixed tariff to beat the price rises.”
SSE, British Gas and npower have blamed rises in the wholesale price of energy, as well as the extra costs involved in trying to deliver Government energy- efficiency programmes designed to reduce the amounts of gas and electricity that households use.
Ann Robinson at uSwitch said: “As energy becomes less and less affordable, the more we will see people rationing and going cold. The knock- on cost in misery and the potential impact on health and wellbeing could be immense.
“Consumers are paying a steep price for the fact that successive governments have failed to put affordability at the heart of their energy policy.”
Adam Scorer, director of the watchdog Consumer Futures, said that urgent action by ministers was needed to address problems in the energy market.
“The rise from npower is the largest so far, adding to a growing sense of desperation among many consumers that energy costs are now spiralling way beyond their means,” he said.
“Rising prices, the complexity of the market and of Government policy are conspiring to create a crisis of confidence. Two reviews are needed: a competition review of the full structure of the energy market and a value- for- money review to ascertain the costs and benefits of Government policy.”
Scorer added that the trade- off between cutting carbon emissions and meeting the UK’s demand for needs was very complex.
“We need to take stock and see whether we are striking the right balance between security, affordability and carbon,” he said
Richard Lloyd, executive director of campaign group Which?, was eager to echo the concerns raised by Scorer.
He said: “We need an expert and independent review, one that reports to Parliament, of the whole Government energy policy and wholesale market costs, with an assessment of whether consumers are getting value for money and where savings can be made.”