10th May 2013
The UK’s energy giants are battling it out in an attempt to lure customers onto their respective fixed price plans with npower the latest in the game to raise the stakes writes Philip Scott.
The npower Price Fix September 2016 offers the longest price protection on the market, according to comparison site uSwitch, with the fix not expiring until 30 September 2016. In addition, the plan does not carry any exit penalties, putting it in direct competition with EDF Energy’s popular Blue + Price Promise.
Npower’s tariff costs £1,317 a year – £16 a year more than ScottishPower’s Fixed Price Energy February 2016 and £125 a year more than EDF Energy’s Blue + Price Promise February 2015. However, in return for this premium consumers receive security against price hikes for a further eight and 19 months respectively.
The move now means consumers have a range of attractive fixed price tariffs to choose from, ranging from a year to over three years long. However, as the fixed price period gets longer so the price is creeping upwards. The cheapest variable priced tariff on the market is Spark Energy’s Advance plan, which costs £1,041 a year but it requires customers to pay upfront for their energy use. It comes in at £276 a year cheaper than npower’s new fixed price tariff but it has no pricing guarantees.
Although the new longer-term fixed price tariffs are now carrying a premium for the protection they offer, they are still cheaper than suppliers’ standard tariffs for customers who are paying by cash or cheque. To benefit from the price protection and to cut their bills these customers need to pay by direct debit.
Tom Lyon, energy expert at uSwitch said: “It looks like suppliers are on the verge of an all-out fixed price war and this spells very good news for consumers looking for shelter from potential price hikes. Npower’s new plan is a double whammy as it not only offers the longest price protection on the market but it also does not carry any early exit penalties. This will definitely give rivals a bloody nose and lowers the risk to consumers of locking in for such a long time.
“As ever, consumers always have to weigh up their options and the fact is that there are some cheaper options available if you are prepared to take a chance with price hikes. However, the prospect of knowing what price you will be paying for almost three and a half years will prove too good to resist for many, so I would urge consumers to plan ahead and start shopping around now.”