If there is a positive spin one can put on the energy market, it is that it is predictable. October is traditionally the month that suppliers raise their rates, unfortunately coinciding with when many will be turning their thermostats up to combat the cold winter weather. The industry is holding its breath waiting for the first supplier to go public with a price hike – and where one goes the rest will follow.
The current average annual dual-fuel bill is a record-breaking £1420. From speaking with suppliers, we’re predicting that all the major players will shortly announce rises of between five to ten per cent. At worst this will push this bill well over £1500.
At the same time, Ofgem’s new regulations are set to limit the number of tariffs that suppliers can offer. Where suppliers used to offer limitless variations of tariffs, now they will only be able to offer four types – most likely to be a standard tariff and short, medium and long-term fixes.
Ofgem’s bid to simplify the market is beginning to have the unintended consequence of cheap discounted variable tariffs being scrapped. The number and variety of great deals on offer will soon vanish.
Despite this grim outlook, there are ways of keeping bills to a minimum and making the best of a bad situation.
Quite simply, loyalty doesn’t pay. The first step for anyone is to compare the tariff they are on to the competition. The savings to be made from switching can be as much as £320 per year.
We would advise consumers to switch to a fixed tariff so their bills will be fixed for up to three years.
By switching to a fixed tariff, consumers can benefit from average dual bills of £1170 and most importantly, price certainty.
First:utility iSave Fixed v9 tariff is fixed until April 30, 2015, with a typical saving of £250.
For even longer certainty EDF Energy has announced a price fix until 2017.
It is up to you how you play the game. You can take a gamble and switch to a cheaper discounted variable tariff, but there is a high chance these will shortly be pulled and you will be transferred to a higher rate tariff.
With winter approaching and the energy market about to erupt, consumers need to look ahead and ensure that they will not be burned by price rises.
• Mark Todd is director of independent price comparison service Energyhelpline