With consumers getting increasingly irritated by the failure of energy providers to drop their prices to reflect cheaper wholesale costs, Big Six supplier Eon finally broke ranks by launching a fantastic fixed-rate deal.
At less than £770 a year for a typical household, its new fixed-rate gas and electricity ‘dual fuel’ tariff blows most of the other Big Six companies – British Gas, nPower, Scottish Power and EDF – out of the water.
Only SSE has thus far shown its stomach for the fight with a fresh deal of its own – priced at £775, again for average consumption levels.
As far as standard tariff prices (as opposed to fixed-rate deals) are concerned, the Big Six - British Gas, EDF, Eon, SSE, Scottish Power and nPower - have announced cuts, but only to their gas prices.
Eon cut the average cost of gas by 5.1% from February 1. SSE announced an average 5.3% gas price cut to take effect from March 29, while Scottish Power will cut the average price of gas by 5.4% from March 15. NPower is trimming gas bills by an average of 5.2% from March 28, while British Gas is cutting gas bills by 5.1% from March 16. EDF is cutting gas bills by 5% from March 24.
The typical saving on standard tariffs with cuts of this size is a little over £30 a year.
Even when these cuts are taken into account, standard dual fuel tariffs will still be around £300 more expensive than the latest fixed-rate deals.
To get the best price on fixed deals such as this, you have to agree to pay monthly by direct debit. You may also have to pay exit fees if you want to move to a different tariff before the fixed term ends.
Switch now and save £300 a year!
Many customers prefer the familiarity of a Big Six brand name, but the cheapest deal at the moment – and it’s the cheapest for almost five years – actually comes from one of the smaller suppliers.
Extra Energy is offering a 12-month fix at £768.31 a year, again for typical usage. All energy suppliers are closely regulated, so there is no reason not to take advantage of their competitive prices.
If you are on your supplier’s standard tariff, prices at this sort of level make switching a no-brainer if you want to keep warm for less this winter.
Stephen Murray, our energy expert, said: “These low prices are what consumers deserve in view of the sharp falls seen in wholesale gas prices over the last year.
“There are savings of more than £300 out there for anyone currently on a standard tariff, so customers should be switching now, while the weather is still cold and heating is on full pelt.”
The market regulator, Ofgem, is urging people to get savvy and switch to cheaper energy deals.
Where to next for the market?
So all eyes are on how the other big suppliers – and YOU the consumer – respond. The more people switch supplier, the more competitive the market will get, and the further prices will fall.
Remember, switching is a straightforward process. You can complete a quote and initiate a switch in around 10 minutes on our site, and it should then take 17 days for the switch to take place.
There’s no need for any work inside or outside your property and there’ll be no interruption to your supply. All you need to do is send final meter readings when requested, and settle any outstanding payments to your old supplier.
Why prices are falling – and why some are not!
Wholesale energy prices have plummeted in the last 12 months.
Gas prices have plunged by close to 30%, while electricity prices are down about 8%.
Yet many companies have ignored the impact on this on their standard plans, leading to claims of “profiteering” by the major providers.
The launch of low-price plans by Eon and SSE in particular may finally persuade the others to up their game.
“Eon has now made a very clear move in response to falling wholesale prices, and this will hopefully force other big players to cut standard prices for both gas and electricity,” Murray said.
In the meantime, however, anyone on a standard tariff should take advantage of a better deal now, while those on fixed plans should plan to switch as soon as their deals come to an end.
“While we await the other big suppliers to make their move to cut costs, consumers can rest assured the best deals can be won by switching, not staying on standard tariffs," Murray added.
“For anyone worried about how much they spend heating and lighting their home during winter, it should be comforting to know that savings of more than £300 are up for grabs.”
Please note: any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.