So which tariff is the cheapest now?

Low interest credit cards > Credit > So which tariff is the cheapest now?

Keeping pace with the utilities industry has been no easy task over the last six weeks as provider after provider has increased prices.

Five of the UK’s ‘big six’ energy firms have hiked their gas and electricity costs. Scottish and Southern Energy customers remain the only householders not to have seen their energy bills rise, although their stay of execution is likely to be short-lived. The company, which operates under the names Southern Electric, SWALEC, Atlantic, and Scottish Hydro has said its prices will not go up until after the clocks have gone forward at the end of March.

In case you’ve lost track, here’s a table outlining the price increases we have seen so far:

Provider

Gas increase

Electric increase

British Gas

15%

15%

Npower

17.2%

12.7%

Scottish Power

15%

14%

E.ON

15%

9.7%

EDF Energy

12.9%

7.9%

SSE

TBC

This table does not tell the whole story, however. When British Gas increased prices in January, it kept the cost of its Click Energy 4 tariff unchanged. This online deal was the cheapest product for the average household – but it isn’t any longer.

Last week, the country’s largest energy provider increased the cost of its Click Energy 4 tariff by 18.6% -adding an average £138 to a customer’s annual bill.

So how does the latest activity leave the market?

Online tariffs remain the most cost effective option, with E.ON’s Energy Online Extra 5 now being the cheapest deal for the typical household in most regions. Atlantic’s Standard Online deal is cheapest in Eastern England and the East Midlands.

However, E.ON’s recent price hike applied only to its standard tariff, so anyone signing up for the Online Extra 5 deal should be aware that if it adopts the same strategy as British Gas, the price could go up in the not too distant future. Similarly, Atlantic’s prices have yet to change, so anyone signing up for its deal should bear this in mind.

This should not put you off switching though. Two-thirds of energy customers are still on their provider’s standard tariff paying quarterly by cash or cheque: they could save more than £300 by moving to a different product.

With further price rises possible, some people may think it is a good time to lock into a fixed rate product. However, the premium you have to pay for this protection is such that prices would have to rise significantly for it to be worthwhile. Fixed rate deals can often be more expensive than the provider’s standard tariff as the table below illustrates.

Provider

Average online
tariff rate

(Monthly Direct Debit)

Average standard
tariff rate
(Quarterly Cash
or Cheque)

Average fixed
tariff rate

(Monthly Direct Debit)

British Gas

£879.97

£1055.51

£1,015.83

EDF Energy

£818.93

£1006.96

£965.57

E.ON

£768.99

£1030.84

£983.47

Npower

£900.52

£1055.76

N/A

Scottish Power

£944.11

£1,099.69

£979.26

SSE

£803.94

£875.07

N/A

*All tariffs are based on average consumption levels (Gas 20,500kwh and Electric 3,300kwh). Sourced by moneysupermarket.com on Feb 12, 2008.

The best option for most people is to switch to an online deal and pay by monthly direct debit. However, the cheapest product varies depending on usage and where in the country you live. To find out which tariff is the best for you, enter your postcode into our gas and electricity comparison tool and start saving now.

 

Leave a Reply

Your email address will not be published. Required fields are marked *