In recent months, five of the UK’s ‘Big 6’ energy providers - npower, E.ON, Scottish Power, SSE and EDF – have announced price rises for those on standard variable tariffs, with the sixth - British Gas - freezing its prices until August.
The majority of energy customers in the UK are on standard variable tariffs – 66% according to Ofgem1 – and most of those have never switched their energy supplier. This means that if you have never switched it is likely that you are on a standard variable tariff, and could well be one of the 12 million2 customers affected.
But who exactly has been hit the hardest by these price rises, and what will the real impact be?
The most significant rise to date came from npower, whose standard variable rate dual fuel (gas and electricity combined) customers saw a 9.8% rise in March.
The average increase suffered by all those Big 6 dual fuel customers who have been affected stands at 8.4%, with annual bills rising by an average of around £97.
But alarmingly, these customers may actually be overpaying by a lot more if they haven’t switched to a cheaper fixed rate tariff in recent years. Even if we include those with British Gas, who are as yet unaffected by the price rises, the average saving when switching from a duel fuel, standard variable tariff is around £398.
Who will be most affected by the price rises?
Although the price rises will affect the whole country, each supplier has higher and lower concentrations of customers in certain regions. This means that certain parts of the country will be affected more than others – those regions with a greater number of customers experiencing a higher percentage price increase.
Take a look at our graphic below to see which areas will be affected most.
Customers on a dual fuel tariff pay one price for their gas, and another for their electricity. In the recent round of price hikes, electricity costs increased by as much as 15% in some cases, far outstripping the rise in gas prices.
This means you could now be paying 15% more for the same amount of electricity.
If you use an average amount of electricity per year (4000 kWh5), then the extra money you are paying now would previously have bought you an additional 600 kWh – that’s energy that you’re simply not getting. It’s almost as if you’re paying to power someone else’s house!
3. Figure correct for npower, E.ON, Scottish Power, SSE and EDF – based on MoneySuperMarket data 2016
4. Figure correct for npower, E.ON, Scottish Power, SSE, EDF and British Gas – based on MoneySuperMarket data 2016
5. Based on MoneySuperMarket data 2016