Banking

Best energy deals: Switch now before the October price cap hike

The energy price cap will be hiked on 1 October – raising bills for millions of households across the country.

Most of the Big Six firms have confirmed they will be putting up their prices by 12 per cent in line with the cap – the equivalent of £139 a year on average.

This will take bills for those on default tariffs to £1,277 a year, up from £1,138.

However, customers do not have to accept the hike in costs with many now encouraged to switch provider or tariff before the beginning of next month whilst they still have time.

Households are encouraged to switch energy provider before the price cap comes into play

Whilst switching suppliers online is a quick and easy process that will take just a matter of minutes, it generally takes around 21 days for a switch to take effect.

As such, those who shop around now, using price comparison services such as the one This is Money offers in partnership with Compare the Market, should be with a new provider by the time the new price cap is enforced.

Households are encouraged to switch to fixed tariffs which are typically much cheaper than default tariffs.

Customers can choose to move to either a 12 or 24 month contract.

Justina Miltienyte, energy policy expert at Uswitch, said: ‘Fixed deals are the only way to avoid the volatility of the price cap. However, there are different durations of contract depending on the tariff that you sign up for.

Many providers price their tariffs right up to the limit and have been accused of treating the cap as a target 

‘Typically, most households will opt for a 12 month fixed deal, meaning that they can take advantage of the best market rates – and review their plan annually.

‘A 24 month fixed deal might be a better option for other households however, if you do commit to a 24 month plan make sure to choose a deal with zero exit fees. This means you can switch away without any hefty exit fees.’

Many will likely be looking to move tariff as the new price cap is the largest increase since it was launched at the start of 2019.

The hike has been blamed on a rise in wholesale energy prices, as well as suppliers trying to recoup costs after customers missed payments during the pandemic. 

The cap was initially introduced to stop providers charging rip-off prices to households that do not switch every year.

It is reviewed twice a year to reflect the costs of supplying electricity and gas for suppliers, however, many providers price their tariffs right up to the limit and have been accused of treating the cap as a target. 

Switching to a fixed deal could save customers hundreds of pounds, according to experts

Switching to a fixed deal could save customers hundreds of pounds, according to experts

Best energy deals currently available

To help customers find the best deal for them, This is Money, with help from Uswitch, has put together a list of the best energy tariffs currently available. 

Currently, the best value deal is with Eon Next on two of its tariffs, or with Sainsbury’s Energy on its Sainsbury’s Energy 1 Year Fix and Reward v19 deal.

All three deals cost an average of £1,177.43 a year with Eon Next’s Next Online v7 and Next Drive v4 both fixed for 12 months with green credentials. 

However, the Sainsbury’s deal is not green meaning the offer may not be best for those who are more environmentally friendly. 

Ovo Energy also makes the list with two deals at £1,220.06. One is its 2 Year Fixed Energy tariff whilst the other is a 12 month fixed contract, Better Energy. 

Whilst the majority of the deals do not have an exit fee, Ovo Energy charges £60 for those looking to leave early as does challenger supplier, Entice Energy, on its Fixed Saver v15 Online. 

BEST ENERGY DEALS ON THE MARKET 
Supplier Plan Type End Date Green Exit Fee Average Price
E.ON Next Next Online v7 fixed 12m Y 0 1177.43
E.ON Next Next Drive v4 fixed 12m Y 0 1177.43
Sainsbury’s Energy Sainsbury’s Energy 1 Year Fix and Reward v19 fixed 12m N 0 1177.43
E.ON Next Climate Positive v5 fixed 12m Y 0 1182.43
Avro Energy Simple and Prime12M fixed 12m N 0 1185.94
Entice Energy Fixed Saver v15 Online fixed 12m N 60 1197.06
E.ON Next Next Miles v4 fixed 12m Y 0 1207.43
OVO Energy 2 Year Fixed Energy fixed 24m Y 60 1220.06
OVO Energy Better Energy fixed 12m Y 60 1220.06
SSE Online Smart Saver v2 fixed 12m N 0 1220.06
Source: Uswitch (correct as of 9 September 2021)         

Electric car owners: Best EV tariffs 

Many electric car owners will be worried about the price increase – especially those with chargers at home.  

But there are now several tariffs available specifically for electric vehicles with experts encouraging households that have a home charge point to find a competitively priced electricity tariff. 

However, it is difficult to work out the exact annual cost of an EV tariff, as most of them charge different amounts for day and night, and the average consumption figures don’t give a time of day breakdown.

Experts have said that usually the best tariffs are those which offer a cheaper energy rate late at night, when most people will be charging their electric vehicles. 

These tariffs require a special electricity meter. Some such as Octopus’s Agile tariff have won big fans among electric car owners who can do well from taking energy off the grid when too much is being produced from wind or solar.

Some of the firms that now offer these special tariffs include British Gas, with its new offering in partnership with RAC, as well as Octopus on its Agile tariff, EDF on its GoElectric rates, Good Energy on its Good Energy Green Driver 7 deal and Ovo on its Ovo Drive tariff.

All give different prices for peak and off-peak rates with the off-peak prices up to a quarter cheaper.

Customers are encouraged to compare prices and deals for themselves to see which would suit them best.

There are now a number of tariffs exclusively for customers who charge their EV at home

There are now a number of tariffs exclusively for customers who charge their EV at home

Could you cut your energy bills… or help the planet and go green? 

Millions of people could be needlessly overpaying for their energy as they fail to switch to providers who offer cheaper deal.

They may also be missing out on the opportunity to help the planet and fight climate change, by switching to green deals that offer electricity from renewable sources and more environmentally-friendly gas.

With our partner, Compare the Market, you can compare energy tariffs and exclusive deals.

Why not find out if you could save hundreds of pounds a year on your energy or go green?

>> Check to see if you can start saving money now

How have energy prices changed?

Many of the best tariffs available are now well over the £1,000 mark which is a big difference compared to earlier in the year when customers were able to get a deal for under that amount.

This is likely due to the rising wholesale costs that have affected the industry as a whole as well as the price cap – which itself was influenced by wholesale costs and the coronavirus pandemic.

Ofgem, the energy regulator, told the BBC that UK household energy bills will be affected by soaring prices of fossil fuels globally.

It said increasing prices, for gas in particular, ‘will feed into all customer energy bills in the UK’ – but added the price cap is still one of the best tools to ensure consumers pay a fair price. 

However, it is not just the Big Six putting up its prices – with other competitors, small and large, also hiking costs – but there are some providers standing firm, experts say. 

Gareth Kloet of GoCompare Energy, said: ‘With a number of energy providers seemingly following the Ofgem cap and increasing their tariffs by 12 per cent, it may seem like the whole market is offering the same prices, but this is not the case.

‘There are still a number of providers such as The People’s Energy, Pure Planet and PFP Energy, who have yet to increase their prices and some of the smaller suppliers are still cheaper than the Big Six.

‘There are some smaller providers who have also increased their tariffs, at varying rates, such as Outfox the Market, who have increased their default tariff by 7.23 per cent.

‘The biggest rise so far comes from Igloo Energy, which has increased its tariff by 14 per cent. All others have put their rates up to the price cap level with more to follow.

‘If you want to secure your prices now, longer term fixed rate deals are there to offer security for the next 12 months or even two years, therefore protecting yourself from further increases.’

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button