Millions of households could see energy bills soar up to £439 as fixed priced deals end in July

19 July 2019

Energy suppliers are increasing prices on hundreds of deals, going up by £269 on average for each household

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Energy bills for millions of households could soar by as much as £439 after hundreds of fixed price deals come to an end in July, August and September, according to price comparison site uSwitch.com.

The average increase will be £269 per household, but those supplied by iSupply, Ovo and Green Network Energy will see even greater hikes of £439, £367 and £342 respectively.

Customers who don’t move to a cheaper deal will be automatically rolled onto default standard variable tariffs, which are typically among the worst value energy plans.

Some 276 expiring tariffs from 37 suppliers will add £426 million to the energy bills of around 1.6 million households.

Many of those hit by the rise are likely to have chosen their fixed deal last summer, when 13 price rises in the space of three months added an average of £71 to the bills of over nine million energy customers.

This resulted in 1.5 million consumers switching provider between July and September 2018.

Energy regulator Ofgem decided to raise the level of the energy price cap in April. The cap sets an upper limit for default tariffs and are usually among the most expensive on the market.

Following this rise, 44 energy companies increased the cost of their standard variable tariffs by up to 17%.

Ofgem is expected to announce that the price cap will decrease by around £80 next month, but this lower rate won’t take effect until 1 October.

uSwitch warns that even when the cap is reduced, those energy customers on default tariffs could still be overpaying by around £300 a year. 

Suppliers with most expensive rollovers to default/standard variable tariffs

Supplier Tariff Fixed plan price Default tariff price Increase (£) Ends

iSupplyEnergy

iFix 33-Month Aug19

£815

£1,254

£439

17/08/2019

Ovo

2 Year Fixed Energy (all online) 01 September 2017

£882

£1,249

£367

16/09/2019

Green Network Energy

GNE Family 18 Month Fixed V14

£892

£1,234

£342

16/09/2019

First Utility (now Shell Energy***)

First Fixed September 2018 Full Service

£937

£1,254

£317

30/09/2019

Engie

ENGIE Fixed Sept 19 v3

£884

£1,194

£310

30/09/2019

Source: uSwitch July 2019

Price cap

Ofgem introduced the energy price cap on 1 January to protect customers from unjustified price rises.

It originally set the cap at £1,137 per year which then rose to £1,254 on 1 April. The energy regulator says the cap will save customers around £76 a year on their bills.

The price cap level will be updated in April and October every year to reflect the latest estimated costs of supplying electricity and gas, including wholesale energy costs.

Annual energy bills in Britain have doubled over the past decade, rising by about £1,200 per household.

Customers attracted by cheap year-long fixed tariffs end up being moved on to the pricier standard variable rate once their deal ends, unless they switch providers.

Experts have criticised the cap as suppliers can hike prices when the cap goes up and that it could actually cost consumers more money if they don’t shop around.

Switching

A growing number of households are switching away from the Big Six in favour of smaller alternatives as a result of price hikes.

Anyone on a fixed-term tariff has a right to switch to a new deal without paying exit fees when there are 49 or less days before the fixed-term ends.

Rik Smith, energy expert at uSwitch.com, says: “Energy bills might not be front of mind just as everyone is about to head off on their summer holidays. But over one and a half million households could be in for a nasty shock when they get home if they don’t act now.

“There was more than one price rise a week during 2018, and many of those who switched to escape the onslaught then are now seeing their fixed price plans coming to an end. It’s time to take action to avoid being rolled onto an expensive standard tariff.”

 

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