Scott Byrom, Utilities Manager

Scottish & Southern Energy is the latest provider to hike its gas and electricity bills. With all of the big six now having announced price increases this year the picture is clear - it's loyal customers who are being hit the hardest...

Scottish & Southern's decision to hike the cost of electricity by 14.2% and gas by 15.8%, means that all six of the major energy firms have now increased prices since the beginning of the year. British households are now paying an additional £1.5billion a year in fuel bills.

Worst affected are the people who have never switched energy provider. There is no reward for loyalty when it comes to gas and electricity suppliers and the message to consumers is switch to a better deal - you could save yourself more than £300 a year.  

Indeed a frontrunner has emerged - for users with medium consumption levels, the Npower Sol 10 tariff, which averages less than £800 for an annual bill, is the cheapest in all 14 regions of the UK albeit there are some sizeable price differences - for example you'll pay £100 more on the same tariff if you live in South Wales, compared to London.

However, the key message to consumers looking to compare gas and electricity tariffs is to not pay the price for loyalty.

Why you could be paying over the odds
Gas and electricity prices vary from region to region and providers put the price differentials down to factors such as transport and generation costs. However, that doesn't tell the whole story.

More than six million households have never switched provider and firms are using this apathy to boost profits. They charge customers in their incumbent regions - the areas of the country where they were the monopoly supplier prior to deregulation - more than new customers in areas where they are seeking to increase market share.

In some instances, 'loyal' customers are paying £370 a year more for their gas and electricity than they need to. The table below highlights the annual savings that can be made from region to region.
 

*Sourced by moneysupermarket.com on March 25, 2008.

Why are consumers staying put?
With such significant savings to be made consumers need to make a stand and show that they are not prepared to be treated in this way any longer.

Many are reluctant to switch to another deal because they are happy with the service they are getting from their current provider and don't want to risk any problems by changing provider. The good news for these people is that you don't have to change supplier to secure a cheaper deal.

By moving to your existing provider's online monthly direct debit tariff you could save an average of £260 a year. For example, an Eon customer with typical consumption levels paying quarterly on an average standard tariff would pay £1,063 a year. Yet by switching to Eon's online tariff and paying by monthly direct debit the same customer could cut their bill down to £769 a year - saving £294.

However, if you are prepared to switch, the savings could be even greater as the table above shows. It's easy to find out which provider is offering the best deal for your own circumstances: all you need to do is enter your postcode into a comparison tool and input a few details about your consumption. Once you've found the cheapest tariff and applied for it, your new provider should take care of the transfer process - and at no extra cost. Most energy contracts work on a rolling 28day basis - meaning there are no penalties for switching so there should be nothing holding you back.

And if you act quickly and apply for a new deal before April 1, you can take advantage of moneysupermarket.com's £30 cashback offer.

Relevant Links

• Compare tariffs from UK gas and electricity providers