Energy companies are raising energy prices: avoid the hikes by getting a fixed rate deal
Some of the major providers have announced they are raising energy prices over the next month
British Gas, Scottish Power, EDF and nPower have all announced they are raising energy prices over the next month. Any energy customers who want to avoid these price hikes need to get on a fixed rate, and soon.
British Gas and Scottish Power are raising their price by 5.5% from May 29th, which will increase the average annual bill by £60.
Meanwhile, EDF is bumping up their electricity price by 2.7% on June 7th, while Npower will increase its prices by 5.3% from June 17th.
Criticism has been quick, with the hikes deemed unjustified by the government and consumer interest groups.
Ofgem is advising energy customers to shop around, and there’s a sound argument for doing so. Switching to a smaller supplier can save you £205 a year, on average.
The price rises are predicted to continue, as many energy companies seek to recoup losses from the government’s recent energy price cap.
The only way to avoid those hikes is to get onto a fixed rate tariff now, and for as long as possible, to protect yourself from future rises.
Fear of collapse
Though many customers fear that a small supplier’s collapse could put their services at risk, Ofgem’s “safety net” policy means your supply will never be cut off – you’ll simply be switched to a different supplier.
That said, you’ll have to renegotiate your contract or decide to switch again, so it’s worth picking suppliers who are relatively well-established - even if their prices aren’t the cheapest on the market.
It’s also worth asking yourself if the supplier you’re switching to is likely to offer you decent customer service – especially if you intend to stick with them on a fixed rate for a number of years.
Consider Iresa, who this time last year was offering the cheapest energy deal on the market. Last month, they were banned from receiving new customers after a string of customer service failures.
Don’t skimp on service
There are only two reasons to stick with an expensive supplier – online meter readings and 24-hour customer service.
Online metre readings are redundant if you have a smart meter. By 2020, every energy supplier will be obliged to install your smart reader at no extra cost, if you ask for it.
And the Trustpilot reviews of some of the companies raising their prices shows that 24-hour service doesn’t necessarily mean your complaints will be resolved sooner. nPower’s service is abominable, at 0.6/10. And British Gas isn't much better, at 3.2/10.
By switching to the right supplier, you can get cheaper prices and much improved customer service, even if those suppliers don’t have the resources to offer 24-7 call centres.
At XLN, we offer low rates, frozen for up to four years for small businesses. You can find out more about XLN Energy on our website.