Seven cheap energy deals come to an end
A host of cheap energy deals, including fixed priced plans safeguarding people from energy price rises, are coming to an end from 1st May. Seven low-cost energy plans, dating back to 2009, will end in May and June. As a result, if people aren't vigilant they could see their energy bills rocket, warns uSwitch.com, the independent price comparison and switching service.
Three of the seven plans coming to an end cost less than £900 a year, offering an average bill size of just £840 a year. In contrast, the same customer moving onto their supplier's standard plan today could expect to be paying £1,039 a year on average - £199 or 24% more. In the worst case scenario customers could see their bills go up by £227 as their fixed price ends.
One of the plans coming to an end - E.ON's Track and Save Version 4 - costs £1,000 a year on average. This is still £33 a year cheaper than E.ON's standard plan. However, it is £94 more expensive than E.ON's online plan. Likewise with British Gas' Price Promise June 2011 whose price - £1,014 - is £119 more expensive than British Gas' current online plan. In fact these are the only plans coming to an end where customers could actually save money as a result.
Online energy plans continue to offer the best value for money and the best way for customers to avoid a ‘bill shock' as their competitively priced plans come to an end. The cheapest online energy plan in the market costs £895 a year. This is £23 a year less than the average plan coming to an end, therefore offering a great alternative to seeing bills increase by almost £200.
Just under 7 million UK households are currently on price guarantee plans and suppliers are expected to be contacting householders on plans that are due to end to let them know what their options are. Many may be tempted to sign up to a new fixed price plan because of fears that the current instability in Libya and the crisis in Japan could push up household energy prices in the UK.
Fixed price plans do offer protection, but this can often come at a premium. The average fixed price plan currently available costs £1,040 a year - £102 a year more than the average online plan. This is why it is so important for consumers to consider all options before signing up to their next deal.
Thomas Lyon, energy expert at uSwitch.com, says: "The fact that so many people will be seeing their energy prices go up as their current cheap energy deal comes to an end means that these plans have been doing their job. Many of these households face an increase of around £200, which could come as a bit of a shock. With energy prices so high and so much uncertainty over future prices consumers face an important decision and we would urge them to take the time to shop around.
"Fixed plans are definitely right for some, but they do carry a premium. Online energy plans consistently offer the lowest prices, coming in at around £200 a year cheaper than standard tariffs. An online plan could be a good option for those who want to enjoy low prices today while having the flexibility to move onto a fixed price plan in the future if it looks like prices are going to go up.
"For those who prefer the security of a fixed price plan our advice is to see what your current supplier can offer, but then compare with other fixed price plans in the market to find the most competitive deal. It's also important to be aware that most fixed or capped plans carry an early exit fee - consumers should always check the small print carefully and ensure that an energy plan meets their needs before signing on the dotted line."