If you’re one of the 11 million homes powered by British Gas you may think you can heave a sigh of relief as they’ve announced that fuel prices are on hold until August. So, until next winter, you can strip back the layers, pack away the mittens and crank up the heating another notch (or two). Or can you? 

What does this mean? 

It seems like good news for customers of Britain’s biggest energy supplier who have a 36% market share, especially in the light of price rises by fellow ‘Big Six’ providers. Scottish Power announced that from 31 March, their standard electricity prices will increase by an average of 10.8% (on average) and gas by 4.7%, and dual fuel customers will see increases of 7.8%. Npower also said that it would be raising electricity and gas prices by 15% and 4.8% respectively from the 16 March. Whilst EDF Energy did their best by cutting gas prices earlier this year by 5.2%, and then announced price prises of 8.4% for electricity customers from 1 March.

Although, before you do start turning your home into the tropics, it’s worth knowing that if you are a British Gas customer, you could actually get a better deal elsewhere

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Peter Earl

Head of Energy

comparethemarket.com

“A welcome move by British Gas. However, its price freeze does two things: it could encourage customers on its standard variable tariff (SVT) not to bother switching and also flies in the face of Npower and Scottish Power, who have both announced price rises. The reality is that British Gas’s SVT is not competitively priced when you compare it to the best fixed tariff deals currently available on the market. We know from Ofgem research that people stuck on SVTs who have never changed provider stand to save around £200 by moving to the cheapest available tariffs on the market**. Scottish Power’s decision to hike dual fuel prices by an average of 7.8% is disappointing. It should act as a trigger for many to shop around, although the company will be relying on inertia to combat this.”

When is a good deal, not a good deal?

A deal, isn’t a deal if you can find the offer elsewhere for less money, and whilst British Gas actually froze their standard variable tariff last autumn, it was still one of the most expensive on the market at an average annual cost of £1,044.

So, for the cynics out there, the announcement by British Gas is simply a case of ‘all that glitters is not gold’ because ultimately, you can’t make a bad deal good by promising not to make people pay any more for it when it’s already the most expensive.

In the meantime, energy prices have steadily risen over the last few months, and customers of other ‘Big Six’ energy firms, have already struggled with increases; even before the recent announcements were made. Some households have experienced price rises of up to 26% between September last year and February 2017 (which is exactly what you need in the midst of winter).

Why are prices increasing for some?

Energy suppliers buy gas and electricity up front but wholesale prices have risen by about 15% in the last year; plus, they’re also facing higher costs in order to support environmental schemes and develop renewable energy. But these reasons don’t hold much sway with industry regulator, Ofgem; who pointed out that when wholesale prices of gas and electricity actually fell, back in 2014, energy suppliers suddenly seemed keen to do their best sloth impressions and were slow to pass on any savings.

British Gas have said that they’re able to maintain current prices because they’ll be cutting other costs instead (something else for customers to look forward to).

Can I really get a better deal on my energy?

You really could, and you probably really should. Data from industry regulator, Ofgem, showed that nearly half (45%) of energy users, don’t ever recall switching energy provider – meaning that you could be burning a hole in your wallet.

We know that you might think that switching is going to be a hassle, especially if you’ve been a loyal customer of one supplier for years and in particular if you’ve chosen British Gas based on the fact that they’re the nation’s largest provider – so they must be good – right? However, as we know, size doesn’t matter and big doesn’t always mean better – more than 12% of all switches that took place in January alone were away from British Gas, as customers gave them the cold shoulder.

But regardless of whether you’ll be facing price hikes or not this spring, why not take back control of your thermostat and see what else is out there – if you have never switched you could save around £200** per year on their energy bills.. And if you’re worried about a switch going horribly wrong then put your mind at rest with the Energy Switch Guarantee – it’s a promise that everything will happen just as it should (so no need for torches and candles on standby) – just check that your new provider is signed up to the Guarantee.. So, go on, keep warm and save yourself some cash – become a savvy switcher and make the change today.

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