Brits Gift £3.9 Billon to Energy Providers

Sep 20, 2011, 08:00 ET from moneysupermarket.com

CHESTER, England, September 20, 2011 /PRNewswire/ --

Full round of price hikes from the Big Six adds an average 17.4 per cent to gas bills and 10.8 per cent to electricity bills

Switching energy tariff could save Brits around £313 a year[1]

EDF Energy has the best value tariff in 13 out of 14 UK regions

Bill payers are back on a level playing field as all of the Big Six energy giants have now increased the price of energy for UK consumers. Now this round of price hikes is over gas has increased by an average 17.4 and electricity has increased by an average of 10.8 per cent.[2] Consumers could save almost a quarter (24 per cent) on their energy bills by moving to the best value product, according to moneysupermarket.com, meaning a  collective saving of £3.9 billion for households across Britain.[3]

Research from the UK's number one comparison site, shows EDF Energy takes top spot when looking for the best value energy tariff on the market. Its Fix S@ver v2 product isthe top tariff in 13 of the 14 UK energy regions. Bill payers who have never switched away from their traditional energy provider for their region (the incumbent provider) living in the North West for example, currently pay around £1,351.30 a year on a standard tariff paying quarterly by cash or cheque. Switching to EDF Energy Fix S@ver v2 would reduce their bills to £996 per year; a saving of £355, or 26 per cent.[1]

With the Energy Secretary, Chris Huhne promising to 'get tough' with the Big Six and address the difficulty of switching energy tariffs, research reveals that across Britain, households who have never switched could save an impressive £313 a year on average if they were proactive and moved on to the best value deal.[1] If all the households who have never changed their energy tariff moved to the best deal, the country could collectively save £3.9 billion on its energy bills.[2]

Scott Byrom, utilities manager at moneysupermarket.com, said: "Bill payers will be reeling from the recent price hikes, yet despite the choice available for both gas and electricity, the majority of UK households are staying loyal to their energy provider and therefore paying way over the odds for their gas and electricity. The latest price increase have added an average  to 17.4 per cent to the cost of gas and 10.8 per cent to the cost of electricity, resulting in average annual standard bills of £1,322, now really isn't the time to be apathetic. Those who aren't shopping around for the best deal, are simply burning money; finding the right tariff for your consumption level and region means bill payers could save on average £313 per year."

The best value deals available in the current climate are the fixed price energy deals. Although slightly more expensive than some of the cheapest online tariffs offered by the energy companies, these tariffs provide peace of mind that the cost of energy bills will not increase should there be another spate of price hikes. For example, the cheapest online tariff available is E.ON's Save Online V9 at £982 on average, but, for £1,009 per year on average, EDF Energy's Fix S@ver v2 product offers a safeguard against price hikes until June 2012 for only £27 a year more.[4]

Scott Byrom continued: "Online deals do tend to have the cheapest prices but many are variable and can be increased by the energy companies at any time. With so much uncertainty about whether the cost of energy will to continue to rise, my advice to consumers is to think about taking a fixed energy product and weigh up the peace of mind this type of tariff offers compared to the best price online option. Many of the fixed products share the benefits available with online products such as paying monthly by direct debit to spread the payments and recording actual meter readings with an online account to cut out the need for estimated billing. If households aren't on this kind of deal they really need to act now. The recent increases mean that times are now even tougher, and with the Winter months on the way, bill payers need to act fast to start saving money on their energy bills."

Notes to editors:

Incumbent Vs Best Tariff

                               Best Value Tariff    Incumbent
                  Incumbent                          v Best   Incumbent
       Region      Tariff           (Fixed)           Value    v Best
                                        Potential   Potential
                                         Saving      Saving
                 Total (GBP)  Tariff   Bill (GBP)      GBP        %
                               EDF
                              Energy
 
                               Fix
    Eastern      GBP1,339.45 s@ver v2   GBP997.98   GBP341.47  25.49%
 
                               EDF
                              Energy
 
    East                       Fix
    Midlands     GBP1,325.83 s@ver v2   GBP993.34   GBP332.49  25.08%
 
                               EDF
                              Energy
 
                               Fix
    London       GBP1,293.38 s@ver v2  GBP1,014.23  GBP279.15  21.58%
 
                               EDF
                              Energy
 
    North Wales                Fix
    & Liverpool  GBP1,373.36 s@ver v2  GBP1,023.47  GBP349.89  25.48%
 
                               EDF
                              Energy
 
                               Fix
    Midlands     GBP1,332.90 s@ver v2  GBP1,003.73  GBP329.17  24.70%
 
                               EDF
                              Energy
 
                               Fix
    Northern     GBP1,327.50 s@ver v2   GBP987.99   GBP339.51  25.58%
 
                               EDF
                              Energy
 
                               Fix
    North West   GBP1,351.30 s@ver v2   GBP995.85   GBP355.45  26.30%
 
                               EDF
                              Energy
 
    North                      Fix
    Scotland     GBP1,281.31 s@ver v2  GBP1,032.11  GBP249.20  19.45%
 
                             Scottish
                              Power
                              Online
                               fix
    South                     saver
    Scotland     GBP1,362.71  Dec 12   GBP1,015.23  GBP347.48  25.50%
 
                               EDF
                              Energy
 
                               Fix
    South East   GBP1,296.71 s@ver v2   GBP999.72   GBP296.99  22.90%
 
                               EDF
                              Energy
 
                               Fix
    Southern     GBP1,293.98 s@ver v2  GBP1,016.61  GBP277.37  21.43%
 
                               EDF
                              Energy
 
                               Fix
    South Wales  GBP1,309.13 s@ver v2  GBP1,035.57  GBP273.56  20.90%
 
                               EDF
                              Energy
 
                               Fix
    South West   GBP1,316.35 s@ver v2  GBP1,026.45  GBP289.90  22.02%
 
                               EDF
                              Energy
 
                               Fix
    Yorkshire    GBP1,298.10 s@ver v2   GBP973.23   GBP324.87  25.03%
 
    Average      GBP1,321.57           GBP1,008.25  GBP313.32  23.67%
 


Based on medium usage consumption                                                  

Sourced by moneysupermarket.com 19.09.2011                                      

[2] Price rises announced by UK energy companies Summer 2011

                                 Electricity Average
                   Gas increase  increase    Standard    Date       Date
    Provider       (%)           (%)         tariff      announced  effective

    Scottish Power 19            10         GBP1,391.21 07/06/2011 01/08/2011
    British Gas    18            16         GBP1,286.04 08/07/2011 18/08/2011
    Scottish and
    Southern       18            11         GBP1,265.00 21/07/2011 14/09/2011
    E.ON           18            12         GBP1,254.55 05/08/2011 13/09/2011
    npower         16            7          GBP1,289.00 16/08/2011 01/10/2011
    EDF Energy     15.4          4.5        GBP1,241.00 15/09/2011 10/11/2011
    Average        17.4          10.08      GBP1,287.80


[3]There are 21.6 million homes with both mains gas and electricity to their homes.

Table A.5: Total number of domestic gas and electricity meter points (March 2006)

    Fuel        Meter points
    Gas         21,567,261
    Electricity 26,917,561


Source: Electricity distribution companies and gas suppliers

http://www.ofgem.gov.uk/Markets/RetMkts/Compet/Documents1/DRMR%20March%202007doc%20v9%20-%20FINAL.pdf

http://www.ofgem.gov.uk/Sustainability/SocAction/Publications/Documents1/Ipsos-MORI%20switchingsurvey2009.pdf

According to a survey by Ofgem, 58% of gas customers have never switched their supplier while 57% of electricity customers have never switched. Therefore at least 12.3 million households have never switched supplier.

12,293,338 x £313.32 (average potential saving swapping from incumbent to best energy supplier) = £3,851,748,662, or £3.9 billion

[4]Standard / Online / Fixed - New consumption rates

                   Average
                   Standard      Average Best
    Provider       Tariff        Tariff          Fixed Tariff
                                 GBP1,125.42     GBP1,217.41
    British Gas
                   GBP1,286.04   Web Saver 12    Fixed Price June 12
    EDF Energy                   GBP1,009.05     GBP1,009.05
 
    (wef 10th Nov) GBP1,241.00   Fixed S@aver v2 Fixed S@aver v2
                                 GBP982.00       GBP1,189.88
 
    E.ON           GBP1,254.55   SaveOnline v9   Fixed Price Apr 13
    npower                       GBP982.51       GBP1,126.52
 
    (wef 1st Oct)  GBP1,282.43   Sign Online 23  Go Fix 7
                                 GBP1,190.20     GBP1,020.29
    Scottish Power
                   GBP1,391.21   Online Energy   Online Fixed Saver Dec 12
                                 GBP1,142.18     GBP1,142.18
    Scottish &
    Southern       GBP1,265.00   Price Fix 6     Price Fix 6
    Average        GBP1,287.80   GBP1,071.90     GBP1,117.56


Sourced by MoneySupermarket 19.09.2011

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