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19th of January 2018

Economy



Hundreds of thousands of households face energy bill hikes up to 54%

Bills could rise by up to £418 a yearHouseholds can shop around now for a better deal 33 deals are ending in December and 28 in January

By Rachel Rickard Straus for Thisismoney.co.uk

Published: 05:45 EST, 20 December 2017 | Updated: 03:58 EST, 21 December 2017

Hundreds of thousands of households could see their energy bills rocket in the next few weeks as 61 cheap deals come to an end.

Households that locked into these deals one or two years ago will have benefited from some of the lowest energy prices on offer.

However, when fixed deals end, many energy suppliers move customers on to their standard variable rate, which tends to be considerably higher.

Bills for some families could rise by as much as £418 a year, if they do not shop around for a new, competitive rate, according to Energyhelpline.

Watch out: Many households could see their energy bills rise in the coming weeks Watch out: Many households could see their energy bills rise in the coming weeks

Watch out: Many households could see their energy bills rise in the coming weeks

The price increases will come just as household budgets are strained by the end of the festive period and when families are using more energy than usual to keep warm during the coldest winter months.

As many as 33 deals are ending in December and 28 in January.

The biggest rise could be seen by those coming off a very competitive collective switch tariff with Npower, moving from an average annual bill of £768.62 to £1,186.72 – a difference of £418.10.

Big increases could also be seen by some households on Genergy tariffs and Scottish Power’s Help Beat Cancer Fixed Price Energy January 2018 deals.

Mark Todd, expert from energyhelpline, said: ‘There is a Christmas monster lurking for many families and it’s not a friendly one that puts badly wrapped presents under tree. 

'It's a new expensive energy tariff that hundreds of thousands are being flipped to each month.’

Standard variable tariffs are currently under considerable scrutiny, since the government announced plans to put a price cap on the most expensive ones.

British households overpaid as much as £1.4billion a year on average from 2012 to 2015 because of uncompetitive energy tariffs, the Competition and Markets Authority said last year.

While some standard variable tariffs are considerably cheaper than others, in general fixed tariffs tend to be the most competitive.

THE TARIFFS COMING TO AN END 

These are all 61 tariffs that are coming to an end; the first table shows the 33 ending in December and the second the 18 ending in January. 

The tables are put together by Energyhelpline. 

Source: Energyhelpline Source: Energyhelpline

Source: Energyhelpline

Households that have not switched supplier for some time could make savings worth hundreds of pounds by doing so. 

However despite the advantages, millions have never switched or have not done so for years.  

MAJORITY ON STANDARD VARIABLE TARIFFS WITH SSE OR BRITISH GAS

Over half of all energy customers languishing on poor-value standard variable rate tariffs are with British Gas or SSE.

At SSE, over 70 per cent of customers are still on variable tariffs, energy regulator Ofgem's latest league table reveals.

British Gas ranked second from the bottom with 67 per cent of its customers on expensive standard variable tariffs.

Variable tariffs are around £300 more expensive than the cheapest deals currently on the market.

Of the 10 biggest companies included in Ofgem's league table, the three with the smallest proportion of customers on variable tariffs are all independent suppliers - First Utility (23 per cent), Ovo Energy (28 per cent) and Co-Operative Energy (35 per cent).

Ofgem's chief executive Dermot Nolan said: 'Some of the larger suppliers have a significantly lower proportion of customers on poor value standard variable deals than SSE, British Gas and E.ON in particular. 

'This shows it is possible to help more of these customers get a better deal and it is unacceptable that so many are still paying too much for their energy.'

An SSE spokeswoman said: 'While some customers tell us they like the flexibility that SVTs offer, for other customers they have become less popular.

'That's why we recently announced that from April 2018, we will stop automatically rolling customers on to SVTs when they come to the end of their fixed-term contract. Instead customers will be rolled on to an equivalent or cheaper tariff with fixed prices for 12 months with no exit fees.

'SSE is committed to maintaining the direction of travel away from SVTs and wants to be part of the solution.'

What's the problem with smart meters? 

Smart meters can deliver accurate billing, so why are many people unhappy at having them fitted?

Lee Boyce, Georgie Frost and Simon Lambert, discuss what's good and bad about smart meters in this excerpt from the This is Money podcast. 

Press play to listen to the smart meter discussion below, or listen (and please subscribe if you like the podcast) at iTunes, Acast and Audioboom or visit our This is Money Podcast page. 

 

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