Jack Frost isn't the only one who gets a cool reception at this time of year - our energy bills are rarely met with glee either as we count the cost of turning up our heaters and warming our hands by the gas fire.
However, whereas a seasonal rise in our bills is to be expected, some customers will find their payments taking an unexpected leap as energy providers begin to hike their prices once more.
British Gas was the first provider to increase prices through its 'Market Tracker' tariff in early December. The tariff was designed to closely follow wholesale energy prices and review its prices accordingly every three months.
Next it was Npower that made an unwelcome move back in mid-December by introducing its latest online tariff at a rate that is 17% higher than its previous SOL 8 offering. Unusually, this makes its online deal 9% more expensive than its standard tariff.
On the surface this decision appears questionable as the tariff is unlikely to attract much in the way of new custom.
However, it seems that Npower is simply reacting to renewed pricing pressures such as an increase in the cost of wholesale gas, and this is a sign of things to come across the board with experts predicting average price rises in the region of 15% (around £150 a year) rather than the 10% they had been expecting a few months ago.
Over the coming weeks we can expect providers to close or terminate their most competitive products. Indeed Scottish and Southern Energy's Price Fix 2008 deal, which was briefly the most competitive deal in the UK, was pulled just before Christmas.
Customers lucky enough to get on one of these leading deals in 2007 may avoid price hikes initially but we expect to see price rises on all products in the weeks to come, whether you're on a standard, online, capped or green energy deal.
So what is the solution?
My advice is that you should move quickly to one of the market leading tariffs, which still carry the lowest prices we saw in 2007.
Currently, the best deals can be found in the following tariffs:
- British Gas Click Energy 4 (the cheapest product on the market).
- Scottish Power Online Energy Saver 4.
- E.ON Energy Online Extra Saver 3.
Chances are that in the coming months, energy providers will launch a host of capped deals that fix your payments regardless of further price increases. However, these are likely to be much more expensive than in 2007 and so should only be grasped by those who want real security about long-term payments.
Moving to a market leading deal now makes much more sense and enables you to evaluate new offers as and when they become available. If a better deal does hit the market, you can simply re-apply.
Don't forget too that whenever you make the move you can earn up to £30 cashback just by using the gas and electricity comparison tool at moneysupermarket.com - a welcome money saver as well as peace of mind that you're getting the best deal around.
DISCLAIMER: Please note that any rates or deals mentioned in this article applied at the time of writing and may no longer be available/applicable today.
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