Ovo customers hit with 5.8% energy price hike
The plan, New Energy Fixed, will go up from £1,172 a year to £1,240 with immediate effect.
However, existing customers will be hit too when its variable prices are increased by 6.5% on the 20th May, according to uSwitch.com.
But Ovo points out that less than 20% of their customer base is a on a variable tariff – so the majority or Ovo customers won’t see any change in their prices.
Ovo says that the variable plan tends to be used when customers are between contracts and they haven’t yet moved on to a new fixed tariff.
It is the second supplier outside of the big six to hike prices. Co-op Energy increased prices for new customers on the 12th February by 8.7% or £101 for gas and electricity.
It also announced that it would be increasing prices for existing customers too, by 8.5% for gas and 9% for electricity on the 9th May.
Co-op Energy blamed escalating costs for the move, which will take its average dual fuel bill up to £1,258 a year allowing it to fall to the bottom of the energy best buy tables behind Britain’s big six suppliers.
Tom Lyon, energy expert at uSwitch.com, said: “The fact that smaller suppliers are increasing their prices is not just a blow to their own customers, but a warning to consumers generally that price hikes are back on the agenda.
“Higher wholesale prices translate into higher household bills – unfortunately for consumers it’s rapidly turning into a question of when rather than if.
“There is some small consolation in that suppliers are increasingly bringing out attractive longer-term fixed price plans. Yes, this indicates the direction in which they believe prices are going to go, but it also gives consumers an opportunity to protect themselves against price hikes for anything up to three winters.”
Wholesale prices soared recently in response to gas shortages caused by the extended winter and the coldest March for 50 years. Experts have warned that household energy bills could increase later this year as a result.
uSwitch.com says that EDF Energy’s new Blue + Price Promise tariff guarantees prices until the end of February 2015 and is one of the cheapest deals in the market at the moment.
npower has also launched the longest fixed price energy deal on the market which protects against price hikes until the end of 2015 (31st December).
Lyon added: “With the average household energy bill already an eye-watering £1,353 a year, it’s also important that consumers now take action to reduce the cost of their bills.
“There are two simple steps to doing this – use less energy by making our homes more energy efficient, perhaps by taking advantage of the Green Deal, and paying less for the energy we do use by switching to the most competitive tariff for our needs.”
- Experts predict base rate to rise to 4% – how will this affect mortgages and savings?
- Poorest in society see spending power fall by £40 a month
- Premium Bonds rate hike sees them ‘beat’ easy access savings deals: Are they worth considering?
- Find the best savings rates this week with fixed rate bonds paying up to 4.56%