New research from MoneySupermarket has found that the average cost of the cheapest energy tariffs in the market has spiked by 21%. The average annual cost of the cheapest energy tariffs is now £1,042, an increase of £178 since May 2018. Energy bills are increasing, so what can you do?
This price rise comes before the government’s energy price cap, expected to be operational in December 2018. In April, there were 89 tariffs that were less than £1,000 for the average household. Now there are just four, none of which are fixed tariffs.
The cheapest, which is a variable tariff, is Pure Planet’s 100% Green tariff, at £921 per year. Of the largest big name suppliers, British Gas is offering its ‘Energy Plus Boiler Cover October 2019, costing £1,020.
Other big suppliers have all increased their prices at least twice in 2018, including British Gas, E.On, Scottish Power and EDF.
Suppliers seem to be edging prices closer to the level of the price cap, which is £1,136. It is doubtful whether the price cap will stay at this level. It will most likely increase in 2019 and customers may not be as protected as they think they are.
The price cap is having the effect of creating an artificial market, with suppliers factoring in the price cap into their pricing strategies.