Yesterday SSE announced that it will increase its gas and electricity bills by an average of 9% from 15% October. The news will affect around 3.4 million gas and five million electricity customers. The increases will mean that the average standard duel-fuel bill will increase by £102. But does this signal the start of a new spate of price hikes industry wide and should you be fixing your energy bills?
So does this mean that the other utility companies will raise their prices?
SSE had previously pledged to not increase their prices until October 2012 and they in fact cut their prices in March by 4.5%. But while SSE have been true to their promise they have taken the first opportunity to raise them.
But the big six energy companies have been accused of operating a cartel. Historically, when one energy company raises or cuts its prices (as they all did earlier this year) the others inevitably follow.
Back in May British Gas warned that the rise in wholesale gas prices may force consumer prices up later in the year, so perhaps SSE’s announcement should be unsurprising. The only firm not likely to increase its prices soon is Eon who have promised to keep prices on hold until the end of the year.
But the decision whether to fix has just got easier
Normally the decision whether to fix is a tough one. On the one hand is the attraction of fixing your energy bills so protecting your finances from any prices rises, for a fixed period of time. Usually one winter. But on the other hand fix deals are often more expensive than the cheapest non-fixed deals available. Plus you run the risk of missing out on falls in the price of gas and electricity as fixed deals usually have a lock-in period. To break a lock-in usually requires you to pay a penalty, often negating any potential savings made from switching deals.
But now there are fixed energy deals on the market that are not only among the cheapest deals available (including non-fixed ones) but which have no lock-ins. So effectively you can fix your energy bills for at least a year, so avoiding any price hikes. But, should prices fall or cheaper deals become available you are free to switch your gas and electricity supplier at no cost. Win-win.
The lock-in free fix deals
At present 2 deals stand out. EDF’s Blue tariff is one of the cheapest tariffs available and fixes your energy price until April 2014 – with no exit penalties. (Update 31st August 2012 – EDF has now pulled this deal due to the volume of customer demand)
Also Scottish Power offer the Nov 13 fix – which as the name suggests fixes your energy bills until Nov 2013.
What to do
If you follow my guide “6 ways to cut your energy bills” it will take you through how to compare the best deals out there for you. I did the same last week and ended up fixing with the Scottish Power deal, saved over £200 and got over £50 cashback for my troubles.
So what are you waiting for? If you are interested in fixing, be warned these deals will likely disappear due to demand.