Thousands of households face £166 energy bill jump
Analysis by comparethemarket.com has found that there are 182 fixed energy tariffs coming to an end over the next month. And there are nearly 250,000 households on these tariffs, who face a significant jump in their annual energy bill if they don’t sign up for a new deal.
What happens when your energy deal ends?
Energy providers attract customers with their fixed and variable tariffs, which are their cheapest deals. This initial deal will typically run for a year or so.
And once it finishes, you move onto the provider’s standard tariff. These are the most expensive tariffs on the market, and the ones which are subject to the price rises periodically announced by providers.
It’s because of the poor value provided by these tariffs that Ofgem, the energy regulator, introduced the energy price cap which limits precisely how much providers can charge on their standard tariffs.
The energy price cap currently stands at £1,042, but is due to rise to £1,138 in April. This includes an additional £23 that providers can charge in order to cover for the sums they have lost due to unpaid bills as a result of the pandemic.
Switch and save
Of course, you don’t have to move onto your lender’s standard tariff. You could instead shop around and switch to a new fixed tariff, as once your current deal ends you won’t have to pay any exit fees if you want to move to a different deal.
Peter Earl, head of energy at comparethemarket.com, said that with the imminent increase to the energy price cap, now is absolutely the right time to take action and see if you can save money by moving to a new provider if your current tariff is nearing its end date.
He continued: “The impact that the pandemic is having on many people’s finance is becoming particularly stark, and as our latest research shows, the price cap increase is likely to push a number of households, particularly those with children at home, further into financial difficulty.”
Unfortunately, while switching makes a lot of financial sense, it can present its own problems.
Last week some of the nation’s biggest suppliers agreed to refund a whopping £10m after it emerged that many broke price protection rules in place for those who are switching to a new deal, with thousands of households charged twice.
What’s more, a study by complaints experts Resolver has found that as many as one in four have experienced issues with an energy switch, ranging from meter reading discrepancies to demands for payment long after the switch has taken place.