With the clocks going back, winter isn’t far off. So which energy firms offer the best deal?
Npower has announced two new products that could shake up the energy market this winter. Its Go Fix and Go Fix XL tariffs fix your energy prices for one year. That way you can predict payments. Better still, there are no penalty charges for leaving the tariff early. So if a better deal comes along you can grab it. This is great news – exit penalties have been a fixture of energy deals for the past couple of years.
This move could see more providers abandon them. “These tariffs could be ideal for those who are worried about rising prices but would like the flexibility to be able to switch again if any more suitable offers come about, as providers continue to tinker with tariffs to win business,” says Gareth Kloet of Confused.com in The Times.
The move will also be welcomed by Ofgem, the industry regulator. It is bringing in new rules to make energy pricing fairer and more transparent. For example, by December 2010 we will all receive annual statements from our suppliers telling us our energy tariff and consumption, with a standard annual bill to help with comparisons. “The new standards call on suppliers to be clear, fair and courteous and to take the confusion out of comparing products,” says Ofgem’s Andrew Wright on BBC News Online.
In the meantime the best way to find out if you are getting the cheapest deal is a comparison website – try Uswitch.com or Moneysupermarket.com. Wholesale gas prices have plummeted in the past 12 months; it is a shame that much of this reduction has not been passed on to consumers. However, retail prices are a bit lower than last year so check that you are getting the best possible deal; Npower’s new tariff, for example, may be headline-grabbing, but that doesn’t guarantee it is the best deal.
On average a Go Fix tariff costs £994 a year with prices fixed until the end of 2010. But even taking into account penalty charges for leaving a tariff agreement early, there are cheaper deals out there. For example, E.on charges an average of £962 a year for its FixOnline 3 tariff, which locks rates until 1 December 2010. If you want to leave the dual fuel deal before then you’ll have to pay a £30 penalty. Even so it’s a deal that beats Npower’s latest offer.
Bear in mind that the best deal for you will depend on your location and energy consumption. Currently the cheapest overall tariff available is offered by First Utility, which charges an average of £954 a year.
If you are already on your cheapest deal you could still trim your bills a bit by changing the way you pay. Energy firms usually offer discounts to customers who pay by direct debit and those who switch to online billing. And given the ongoing problems at Royal Mail, taking these two options will also help you avoid any late-payment penalties caused by your bill or cheque getting caught in the mounting post backlog.