The firm says the move will see the average annual gas bill on its standard tariff reduce by £33 a year.
It has also chopped £40 off its fixed price tariff for households with average consumption. The firm’s Online Fixed Price Energy February 2016 deal will typically cost £930 a year.
This moves it up from ninth to sixth in the top 10 table of fixed rate deals, the highest of the Big Six providers, which includes British Gas, EDF, E.On, nPower and SSE.
Firms outside the Big Six – Extra, First Utility and Ovo – occupy the top five slots.
Scottish Power’s fixed tariffs do not have exit fees, which means its customers can switch between them without penalty.
Gas price falls
On Monday this week, British Gas announced it was cutting its gas tariff prices by 5% from February 27th, cutting £37 off a typical annual dual fuel bill and bringing it down to £1155 for customers paying monthly by direct debit.
The decision to delay the reduction until the beginning of spring has dismayed many consumers, who point out that January and February are times of peak consumption.
Last week E.On sliced 3.5% off its variable rate gas tariff with immediate effect, resulting in a cut of 2.1% off the annual bills of its dual fuel customers.
This brought the typical bill down by £24 to £1,145 for those paying by monthly direct debit.
At the same time, E.On also launched the Fixed 1 Year v14 tariff, costing £932.99 for a typical year’s consumption. This now sits at seventh on the table.
You can run an energy quote here to see if you could save on your current deal – it’s a five minute process.
If you switch tariff now, you can look forward to cheaper prices in around 17 days – the time it takes to switch supplier.
Fixed rate savings
Fixed rate tariffs are attractive because they undercut standard variable tariffs by over £200 a year in many cases.
They work by fixing the rate you pay for each unit of energy you use for the specified period.
The potential drawback is that, if energy prices fall, the fixed price remains static. But the current availability of substantial savings on energy costs at the coldest time of year is an attractive proposition.
And if prices were to fall dramatically, a fixed price tariff-holder would have the option to switch again. In some instances, this would require payment of an exit penalty of up to £30 per fuel.
Scottish Power, however, does not charge exit penalties. E.On charges £5 per fuel.
Energy Best buy table
Top 10 Energy Deals - based on a medium consumption of 13,500 kWh Gas, 3,200 kWh Electricity
Sourced by MoneySuperMarket 20.01.2015
Provider Tariff Rate Type Average Bill End date Exit fee Extra Energy Fresh Fixed Price Jan 2016 v8 Fixed £918.48 31/01/2016 £25 per fuel Extra Energy Clear Fixed Price March 2016 v3 Fixed £918.72 31/03/2016 £25 per fuel First-utility iSave Fixed v44 March 2016 Fixed £919.49 1 Year £30 per fuel Ovo Energy Better Energy Fixed (Online) (NOTE - Not Scottish Hydro) Fixed £920.11 1 Year £30 per fuel Extra Energy Bright Fixed Price Jan 2016 v8 Fixed £924.72 31/03/2016 £25 per fuel Scottish Power Online Fixed Price January 2016 Fixed £930.03 29/02/2016 NA Green Star Energy Rate Saver 12 Months Fixed version 1501 Paperless Fixed £931.06 1 Year £30 per fuel E.On Fixed 1 year v14 Fixed £932.99 1 Year £5 per fuel Co-operative Energy Fair and Square March 2016 v2 Fixed £944.00 31/03/2016 NA Npower Fixed Energy Online April 2016 Fixed £962.66 30/04/2016 NA
Prices quoted are for tariffs with bills sent by post. ‘Paperless’ versions of tariffs, where available, may be cheaper
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.
* 51% consumers, MoneySuperMarket data, December 2014