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Energy prices falling but only for savvy switchers

1st December 2014 Print

With wholesale energy prices falling to the lowest levels in the past year, and accusations that energy providers are failing to pass on the fall in costs to consumers, analysis by MoneySuperMarket shows that of the cheapest energy tariffs in the market over the past six months, the majority of providers have cut prices, by as much as £189 in once instance - but only to people who are proactive and switch tariffs.

Analysing the top fixed rate tariffs offered by the Big Six energy providers versus the top six smaller suppliers, shows that while the smaller suppliers have consistently provided the cheapest deals over the last six months, some tariff price cuts from the Big Six have been higher. Of the Big Six energy providers, four have cut the prices of their best buy energy tariffs in the last six months.

Of the top 12 energy providers, npower has lowered its tariff prices by the most; a drop of 16 per cent, or £189, since May (although for a shorter fixed term period).  An npower customer who is currently sat on the providers’ standard energy tariff at £1,205 per year on average would currently save a whopping £237 by switching to its cheapest deal. Of the Big Six providers, only SSE and British Gas have failed to provide any reduction in the price of the cheapest tariff; instead, both have increased the cost of their best fixed deal – by £117 in British Gas’s case

Despite some significant reductions to tariff pricing by certain Big Six providers the overall cheapest tariff is still offered by a smaller supplier as it was six months ago. The cheapest tariff currently available to savvy switchers is Extra Energy Fresh Fixed Price Dec 2015 v3 with an average annual bill of £958. When looking at the movement of the supplier tariffs Co-operative Energy has lowered the price of its top tariff by the most over the last six months, a reduction of £174, or 15 per cent, to £1,008.

Stephen Murray, Energy Expert at MoneySuperMarket, says: “It is clear that energy providers are relying on the apathy of the majority of customers by only passing on the reduction in wholesale prices to those people who are savvy enough to be proactive and switch themselves. While it is good to see the cost of energy finally falling, providers should play fair and pass on the saving on standard tariffs as well in order to help hard-pressed households just as we head into the most costly period for energy usage.

“If you are waiting for your energy provider to switch you to a better deal, you could be waiting for a long time and paying through the nose as a result. Therefore people really need to take it on themselves to switch and save; whether that’s taking a cheaper tariff from their existing supplier or making the move to the overall cheapest tariff on the market for them. “If you haven’t moved suppliers within the last six months, you are more than likely going to make a significant saving if you choose to switch now. Six months ago only one supplier was offering a tariff with an average bill sub £1,000, but now there are five, with a further three only just over that threshold with a potential saving for some customers of around £300 it can really make a difference to switch your energy tariff today.”