From Friday 15 September, the energy giant’s electricity price will rise by an eye-popping 12.5%.
The firm is also removing the discount it previously gave to ‘dual fuel’ customers for taking both gas and electricity. The combined effect will be a £76-a-year increase on a typical standard variable rate dual fuel tariff, to £1,120 per annum.
Millions of people are needlessly on expensive standard variable rates (SVRs). All the so-called ‘Big Six’ firms - British Gas, EDF, Eon, Npower, Scottish Power & SSE - have average SVRs prices well over the £1,100 mark.
And the expectation is that the coming winter will see suppliers following British Gas’s lead, with consumers hit with further hikes at the time when consumption is at its height.
The money-saving alternative to an SVR is a fixed rate tariff. Prices for 12-month fixed deals, where you’re guaranteed not to see a price rise during the term, start well below £900 for a typical household with average consumption.
You can lock in today’s prices for longer if you wish. MoneySuperMarket has an exclusive 18-month fix with Green Energy Network priced at £867 a year for typical users. That’s a full two winters without having to worry about a price increase.
OVO, meanwhile, has a 2-year fix with a typical annual cost of £896.
Bear in mind, however, that most fixed price deals include an exit fee, which you pay if you want to get out of the fix before the end of the term.
With Green Energy Network, the fee is £62 for a dual fuel user. With this OVO offer, it’s £60.
It’s also important to remember that, if there’s a general fall in prices during the term of your fix, your price will remain the same.
And you’re fixing how much you pay for each unit of energy you use - you’re not fixing the size of your bill. That will fluctuate with usage.
How long does switching take?
It can take three weeks to switch supplier, but most companies aim for a switching time of 17 days.
Will there be disruption to my gas/electricity supply?
There should be no disruption to your gas or electricity supply. Switching is all about the paperwork and does not affect pipes or cables, so there’ll be no work undertaken at your property, inside or out.
Can I switch if I rent?
Most tenants pay their energy bills directly to the supplier, so they can switch whenever they choose.
If you pay the landlord for your fuel, the landlord would have to agree to any switch and give you the information about your current supplier and tariff.
What’s the difference between fixed tariffs of different durations?
Most fixed tariffs run for 12 months. But as noted above, there are tariffs lasting longer - 18 months, 2 and 3 years.
As a rule, the longer the fix, the higher the price - essentially because you’re being shielded from price hikes for a longer period. So you’re paying for peace of mind and budgeting security.
Remember that when you run an energy quote on MoneySuperMarket, the results are shown in price order, cheapest first. So if you’re interested in a longer-term fix, you’ll need to scroll down the table to find what’s on offer.
If I choose a fixed tariff will my payments stay the same?
No – as noted above, the unit cost of your energy is fixed but the amount of energy you use is not.
For example, you will almost certainly use more energy in the winter than in the summer. Your bills will therefore go up and down, even though the unit cost stays the same.
Can I change my mind about switching?
If you change your mind, you can cancel the switch within 14 days of the start of the contract. After the 14-day cooling off period, you could be charged if you want pull out of the arrangement.
Is it safe to go with a small supplier?
Small suppliers offer some of the most competitive tariffs, but many people are reluctant to switch away from one of the big six firms.
They worry that a small supplier could go bust, or that it could not guarantee a reliable energy supply.
That’s why Ofgem, the regulator, guarantees that you’ll be transferred to another supplier if your own company goes out of business – and there would be no disruption to your energy supply.
Small suppliers tend to score highly for customer service, but not all small suppliers participate in the Warm Home Discount scheme, which is available to certain low-income households.
If you qualify for the discount, you should therefore check before you switch to a smaller supplier.