Thursday 3 November 2016

Consumers should brace for price hikes

Consumers should brace for price hikes

Consumers should ensure they shop around for the best energy deals now, following warnings by experts that the weaker pound is pushing up the cost of imported gas and electricity, according to the Energy Advice Line.

Julian Morgan, managing director of the price comparison, switching and advice service for energy users, said one supplier had already announced a 30% hike for around 70,000 of its customers.

GB Energy Supply, a new supplier that entered the market in January last year, recently announced it would increase average annual bills from £820 to £1,060 for customers on its standard variable deal. In August, OVO Energy announced a 3.6% increase and Co-operative Energy put up prices by 3% in October.

Industry analysts have predicted that other suppliers will follow suit. Samuel Tombs, chief UK economist at Pentheon Macroeconomics, was reported last week as saying that bills could go up by 5% in the short term and 15% over a longer period. This was in response to the wholesale costs for gas and electricity jumping by 20% and 50% respectively since the summer.

"It's now time to act without delay," Mr Morgan said. "Consumers need to shop around to get the best deals.

"The trend is upward for energy prices and consumers need to be pro-active to protect themselves from nasty surprises as the cold weather sets in.

"It's widely expected that the Big Six suppliers will raise their prices this winter, with potentially further price hikes to come down the track."

Mr Morgan said that consumers should shop around and consider locking themselves into fixed deals while they were still available. Although prices were generally on the rise, there were still very good competitive deals available.

"The potential savings to be made through switching are significant, particularly if you have never switched before, or haven't done so for a while," Mr Morgan said.

"Ofgem estimates consumers can save £300 annually but it very much depends on how often you switch.

"For those consumers on a standard energy tariff - by far the most expensive - the savings to be achieved by switching could be even more than £300 annually.

"And even for the very small minority of customers who switch suppliers regularly, shopping around is still well worth doing, even though the savings will be less."

The Energy Advice Line is a consumer champion and an independent price comparison and switching service for householders and small and medium-sized businesses. The service enables consumers to quickly and simply compare electricity and gas prices, and to switch to the best available deal on the market.

The service also offers free advice and a contract management service, including alerts to remind business consumers when their fixed-term energy contracts are about to end.

For further information, visit energyadviceline.org.uk