As many as 600,000 households could see their energy bills leap if they do not move on to a better rate as around 40 fixed-rate tariffs come to an end.
They face average bill increases of £333 if they let their provider automatically roll them on to an expensive standard variable rate tariff, which would amount to a potential £200million windfall for suppliers, according to research by comparison site Compare the Market.
Last month 30 popular tariffs ended, pushing nearly 300,000 people on out-of-contract deals. And a further 40 tariffs are due to end before the end of June, just as the last of the latest round of price hikes comes into force.
Bill hike: 600,000 customers risk price increases of £333-a-year if they don’t switch tariffs
Many of the suppliers with fixed energy deals ending soon have announced price rises this year.
In fact, six of the seven suppliers with deals that ended last month, have added to the cost of the standard variable rate energy deals customers will be flipped on to once their deals end.
Five of the Big Six suppliers and smaller providers First Utility and Co-operative Energy have announced increases so far this year.
This means a double hit for customer bills if they don’t move away quickly.
For example, in March Npower added 15 per cent to its standard electricity prices and 4.8 per cent to gas bills.
Last month seven of the major energy companies’ tariffs ended, meaning a substantial bill hike for customers who don’t switch soon.
Small supplier First Utility has 13 contracts ending over the next couple of months. On April 1 it raised the cost of its standard variable rate by nearly 10 per cent.
Those on its First Fixed June 2017 paid an average £769 each year, but hikes mean that if they roll over on to its standard variable tariff, they will now pay an average dual fuel bill of£1,148.
Peter Earl, head of energy at Compare the Market, says: ‘The cost of not actively monitoring your energy bills is clearer than ever, with energy companies potentially enjoying close to a £200 million inertia windfall from customers who don’t choose to switch.
‘A £333 increase in annual energy bills could be devastating to so many families across the UK. However, the good news is that this can be avoided – by switching back on to a competitively priced fixed tariff which best suits your needs.’
BEST BUY ENERGY DEALS
Supplier Name Tariff Name Tariff Type Price Promise Cancelation Fee Annual Average Cost Bulb Vari-Fair Variable n/a n/a £887 Economy Energy Direct Saver 2017 (v2) Fixed Fixed for 12 months £25 per fuel £889 Toto Energy TOTO Discount Variable Saver Variable n/a £10 per fuel £890 Green Star Energy Rate Saver 12 Month Fixed 2704 Paperless Fixed Fixed for 12 months £30 per fuel £895 iSupplyEnergy iFix 12-Month May18 v2 Fixed Fixed for 12 months £30 per fuel £900 iSupplyEnergy iFix 16-Month Sep18 Fixed Fixed for 16 months £30 per fuel £902 Green Network Energy GNE 12 Month Fixed Family V3 Fixed Fixed for 12 months £31.50 per fuel £905 Green Star Energy Rate Saver 12 Month Fixed 2704 Paper Bill Fixed Fixed for 12 months £30 per fuel £910 PFP Energy Together – June 2018 – fixed 48 Paperless Fixed Fixed until 30/06/2018 £30 per fuel £915 GB Energy Supply GB Online July 2018 Fixed Fixed until 31/07/2018 £30 per fuel £924 Source: Comparethemarket.com. Correct as of April 28 * Savings calculated against the latest OFGEM Supply Market Indicator for average UK home energy bills published 28 July 2016. UK average dual fuel bill for next year calculated as £1,066 a year.
How much could you save by switching?
Before the latest round of price hikes, the average cost of these deals stood at £1,066 a year, a jump of around £333 compared to the cost of the fixed energy tariffs ending soon.
The cost difference after all of the price hikes take effect could be even higher.
The average annual bill for anyone sitting on one of the energy giant’s out-of-contract deals will rise by 8.4 per cent, with average bills sitting at £1,258 once all the price increases take effect.
This is over £370 more expensive than the cheapest deal available from energy minnow, Bulb.
Bulb charges £887, however this is on its variable rate tariff, which won’t offer any protection from price hikes in the future.
The cheapest fixed-rate deal available according to Compare the Market’s best-buy table above is from Economy Energy, costing only £2 more at £889.
The Direct Saver 2017 (v2) contract lasts for 12 months, so you will need to make sure to switch again at the end of the term to make sure you get the best deal.
So why are so many tariffs ending now?
This is a popular time of year for fixed deals to come to an end, with as many as 70 tariffs finishing before the end of June.
Naturally energy bills are at the front of our minds during the colder months when we use more fuel to heat our homes.
But when you switch also affects the number of tariffs you will likely have to choose from.
Peter Earl, Head of Energy at Compare the Market, explains: ‘As people are thinking about their energy consumption in the colder winter months, in response, providers release a higher number of tariffs to cater for those looking to switch.
‘This in turn means there are a higher number of tariffs coming to an end in the winter months, as fixed rate tariffs expire. Another reason is the increase in the frequency/prevalence of tariffs from smaller suppliers.
‘The number of these smaller suppliers has increased in the market, hence the number of expiring tariffs has increased too.’