Energy bills set to soar as fixed tariffs end

New insight from MoneySuperMarket, the price comparison site, reveals that with 124 fixed energy deals expiring before the end of the year, potentially hundreds of thousands of customers risk being rolled on to more expensive tariffs during the coldest part of winter, when energy usage is at its highest.

Providers with fixed tariffs finishing in November and December include five of the Big Six suppliers - Scottish Power, SSE, Npower, EDF and British Gas - as well as smaller suppliers GnERGY, Spark Energy and Extra Energy, which collectively have 47 fixed tariffs ending. Altogether there are 49 fixed term deals expiring at the end of November, with a further 75 on 31st December.

Typically, when these tariffs end, providers will move customers on to a standard variable rate tariff, which is usually their most expensive deal. As such, those affected could see bills rise by as much as £285.

Many fixed tariffs include exit penalties that are designed to deter people from switching during the term. However, market regulation means penalties cannot be charged within 45 days of the tariff end-date, so customers have over six weeks to switch, penalty-free, before their tariff ends.

The actual switching process should take no longer than 21 days, so those on fixed tariffs should start the process of finding a new tariff at least three weeks before their end date, or preferably earlier.

Wholesale energy prices have risen hugely since most of the fixed tariffs that are ending first came onto the market. For example, when Extra Energy’s Fresh Fixed Nov 2016 v1 was introduced in July 2015, wholesale prices were £42.30 per MWh. However, they are now 45 per cent higher, at £61.50 per MWh, meaning customers rolling on to standard variable tariffs now could be in line for even more price hikes over the coming months, unless they take action and switch to another fixed deal.

Kevin Pratt, consumer affairs expert at MoneySuperMarket, said: “With over 120 fixed tariffs ending over the next two months, potentially hundreds of thousands of households could be in line for huge bill hikes unless they take swift action.

“As wholesale prices are so high, there’s only so much time providers will be able to maintain current prices. That means it’s more important than ever that customers on expiring tariffs swap to another fixed deal quickly, so that they lock in today’s prices and don’t fall victim to rising wholesale costs. It only takes a few minutes to find another provider and there are savings of up to £359 to be made by doing so.”