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Cap your energy tariff before you get knee-capped

25th July 2008 Print
The first of the major utility companies has raised prices just three days after our warning that cheap energy will run out on 31 July.

Today EDF Energy knee-capped customers by announcing that gas and electricity prices will go up immediately. It will increase gas prices by 17%, and electricity prices will rise by 22%. Typical families spending around £1,000 for gas and electricity will need to fork out an additional £190 a year on their utility bills.

David Kuo, Head of Personal Finance at Fool.co.uk, says: "EDF Energy could not have timed its increases better to suit its own purpose. School holidays have just begun, and many families who are already abroad cannot easily react to today's increase.

"The timing of the hike by EDF Energy is a clever one. It gains a tactical advantage by stemming the loss of customers to other suppliers because if the customers aren't around, they can't readily switch.

"Today's price increase is likely to be followed quickly by other providers. Therefore, we repeat our warning that cheap energy tariffs will disappear from the market by the end of this month.

"We again urge customers to switch to capped-rate tariffs, and to choose one that lasts the longest. According to energy comparison website Xelector, household energy bills will be 50% more expensive by February 2009, while capped-rate tariffs are currently around 15% higher.

"Consumers rarely get a chance to outwit the utility companies, but failing to switch to a capped-rate deal is tantamount to lighting your boiler with five pound notes."