Npower is latest supplier to hike bills – and more will follow
Today, NPower announced gas and electricity bills will rise by 10% for the one million customers on its standard variable tariff (SVT) from 1 April, adding around £117 a year to the average bill.
The bill hikes come days after regulator Ofgem confirmed the energy price cap would increase by £117 to £1,254 from 1 April.
The cap, which came into force on 1 January, is meant to protect households who are rolled onto pricey standard or default tariffs.
Suppliers have to cut the price of these tariffs to the level of the cap or below.
The cap is updated every April and October to take into account the varying costs of wholesale energy.
According to comparison site Uswitch, more than four million customers will collectively see their bills go up by £490m from 1 April and that number is expected to grow.
Rik Smith, Uswitch’s energy expert, said: “These announcements are coming like clockwork, shattering the myth that the cap is guaranteeing a good deal for customers on standard tariffs. It is vital that households don’t fall for the price cap con.”
Meanwhile Sally Jacques, head of energy at weflip, the auto-switching service, said: “We’d be amazed if other suppliers – large and small – didn’t follow suit, and we expect to see SVT or ‘default’ rates rise across the board.”
How to avoid a price hike
Worried customers are advised to switch supplier.
“With 11 million households on these tariffs – which act as the overpriced holding pens for customers who haven’t shopped around – it’s vital that people take action and switch to better deals,” said Jacques.
“The price cap will never provide the level of protection or the savings that proactively moving from bad deals to good ones will,” she added.
Stephen Murray, energy expert at MoneySuperMarket, said: “There are loads of great deals available the market so check your bill, go online and see what savings are available. It takes five minutes to switch and you could save £200 or more on your annual bills straightaway.”