Npower deal allows customers to lock in prices until 2015
From 1st May 2013, npower tariffs will have a single rate for each unit of energy used bringing an end to the current complex two-tier tariff structure.
Today’s announcement is the first step in a journey which later this year will see the energy giant reduce the number of its standard tariffs and replace them with a small number of simple tariffs that meet new regulatory guidelines, the company said.
At £1,305 a year, the plan comes out cheaper than any of the big six suppliers’ standard cash and cheque plans, according to comparison site, uSwitch.com.
This means consumers sat on old-fashioned and expensive standard tariffs could save almost £50 a year on average by switching to npower’s new plan, while also being protected from price hikes until the end of 2015.
The plan could prove to be a potential saving grace for consumers, with two of Britain’s big six energy suppliers indicating that households can expect energy bills to soar further this year. This week, E.ON refused to rule out a price hike in 2013 pointing to ‘significant uncertainty’ towards the end of the year. Similarly, British Gas stated last October that a further £60 could be added onto household bills this year.
This would make a long-term fixed price deal attractive, especially to those on a tight budget.
However, uSwitch said there are cheaper plans out there for those prepared to take their chances with potential price hikes. SSE’s Discount Energy Bonus May 2015 tariff (with paperless billing) costs £1,134 a year, making it the cheapest variable priced deal on the market. It costs £171 less than npower’s new fixed price plan, however, it offers no price guarantee.
And there are cheaper fixed price plans available, such as Ovo’s New Energy Fixed deal. At £1,172 a year it is £133 cheaper than npower’s new deal, but only guarantees prices for 12 months from going live.
The next longest fixed price plan behind npower’s is British Gas’ Price Promise April 2015, which offers price protection until the end of April 2015. This costs £1,391 a year, which is actually £86 a year more expensive and ends eight months earlier than the npower plan.
Tom Lyon, energy expert at uSwitch.com, said: “As evidence stacks up for another hike to our bills this year, consumers should consider all options including whether they would feel more confident and secure with a long-term fixed price tariff. This new npower plan could be a saving grace to consumers looking to shield themselves from the seemingly inevitable price hikes heading our way.”