Consumers are being urged to avoid an energy bill shock by taking advantage of a last-minute surge in the number of cheap deals on the market ahead of next week’s price cap increase.
New Which? research shows there are now more than 30 energy deals priced at under £1,000 a year – up from just eight in December 2018.
Customers stuck on standard variable or default tariffs at the new April price cap level could save as much as £329 per year by moving to the cheapest of these deals.
The increased price cap level from Monday 1st April is set to add around £117 per year onto the average annual gas and electricity bill for a household which uses a medium amount of gas and electricity.
All of the Big Six energy suppliers, which provide energy for more than 10 million households, have chosen to raise their prices to within £1 of the maximum level of the cap – an estimated hike of more than £1 billion to household energy bills across the country over a year.
To counter this, switching is an effective way for energy customers to save money on their energy bills.
Ofgem had previously predicted that the price cap could cause a reduction of up to 50 per cent in the number of customers switching, something Which? has raised concerns about.
The cheapest dual-fuel deal on the market is currently offered by Outfox the Market – coming in at £925 a year for a medium user. The company was too small to have a Which? customer score in the 2019 annual energy satisfaction survey but some concerns have been raised about its customer service levels – an important factor to consider alongside price when switching.
Bulb Energy has actually reduced its gas prices citing that wholesale costs have gone down.
Although there are currently 31 deals costing below £1,000 per year, this is still less than half of the 77 sub-£1,000 tariffs on offer at the beginning of 2018.
Which? believes the price cap on standard and default energy tariffs can only be a temporary fix, designed to rein in the worst excesses of the broken energy market.
It must be accompanied by a drive to engage consumers and ensure they are aware of options like switching, while suppliers must look for innovative ways to give their customers a better deal and improve customer service.
Natalie Hitchins, Which? Head of Home Products and Services, said:
“Many people who hoped the price cap would bring an end to unwelcome price increases will be left reeling after price hike Monday adds more than one billion pounds to their energy bills.
“If you are one of the millions of energy customers stuck on a rip-off standard variable or default tariff, our advice is simple – switch as soon as possible.
“There has been a recent rise in the number of cheap deals on the market – so you could choose better customer service while potentially saving more than £300 a year.”