Consumers who have benefited from cheap energy deals could soon face higher bills as their special offers and fixed price plans expire.
Many cheap energy deals and fixed rate plans are coming to an end on May 1st so consumers benefiting from these low energy prices are likely to face higher costs as they are moved onto standard tariffs.
Seven low-cost energy plans, dating back to 2009, will end in the next two months. Three of the seven plans coming to an end cost less than £900 a year, offering an average bill size of just £840 a year.
In contrast, the same customer moving onto their supplier’s standard plan today could expect to be paying £1,039 a year on average – 24% more. In the worst case scenario customers could see their bills go up by £227 as their fixed price ends.
USwitch estimate that 7 million households are on price guarantee plans and fixed rate plans and are therefore likely to be hit with higher energy bills soon.
“The fact that so many people will be seeing their energy prices go up as their current cheap energy deal comes to an end means that these plans have been doing their job. Many of these households face an increase of around £200, which could come as a bit of a shock.”, says Thomas Lyon, energy expert at uSwitch.com.
Although fixed rate plans sound attractive, they are often priced at a premium and may work out more expensive than a good online energy deal.
For example, the average fixed price plan currently available costs £1,040 a year – £102 a year more than the average online plan so uSwitch is advising consumers to consider all options before signing up for their next deal.
Thomas Lyons offered this advice “For those who prefer the security of a fixed price plan our advice is to see what your current supplier can offer, but then compare with other fixed price plans in the market to find the most competitive deal. ”
“It’s also important to be aware that most fixed or capped plans carry an early exit fee – consumers should always check the small print carefully and ensure that an energy plan meets their needs before signing on the dotted line.”.
MoneyHighStreet.com comment: Energy companies rely on your apathy, which is why they like direct debit payments so much. Once you are used to paying them a monthly amount without having to think or do anything about it, they assume that you will just let that continue even if there is a big price jump.
It does not take long to see if a price rise is soon to affect you and it is easy to switch energy suppliers, so if you are a smart consumer you will not fall victim to apathy and pay needlessly high energy costs.