Keep an eye on when cheap energy deals end

January often means new energy tariffs and expensive bills with many householders paying £300 a year more than they need to, warns an expert.

Ron Fox, of Noreus Ltd, said that many companies have used discounted fixed-term deals to entice new customers. But once these expire they are moved on to costly standard variable tariffs, known as an SVT, and up to 8 million, or 60 per cent of households, are believed to be affected.

“Many people, who do not shop around, end up paying more for years,” said Ron. “They are usually those who cannot afford higher bills such as the elderly and the vulnerable who are less likely to use a price comparison website.

“Often winter is when these tariffs change and they can be missed by householders busy with Christmas, New Year sales and entertaining.”

The good news for customers is that Centrica, the owner of British Gas, has said it would drop its SVT tariff for all by the end of March this year and replace it with a 12-month “emergency” default rate for those who failed to switch to a better deal.

Scottish Power and German-own Eon have already stopped their SVT tariffs.

British Gas is believed to have had 4.8m customers on a Standard Variable Tariff, Eon 2.2 million and Scottish Power 1 million.

Even so only 10 per cent of all British Gas SVT customers contacted in the last 12 months had moved to cheaper deals.

But Ron warned that while suppliers are not obliged to tell customers on SVTs of cheaper deals, they do have to tell those on fixed-term contracts before the end of their deals that they do have the choice of other options.

The regulator Ofgem, which has welcomed the proposals, is also pressing ahead with a price cap for 2 million of the most vulnerable households by the end of this month.

It has already capped prices for four million households with pre-payment meters.

Meanwhile, the Competition and Markets Authority has announced measures to make it easier for the approximately 700,000 households with “restricted meters” such as Economy 10 tariff that offer cheap rates at certain times of the day to switch.

Ron said the easiest way to find a better price is to enter your tariff and energy usage from your most recent bill on a price comparison website such as Energy helpline, Moneymarket or uSwitch, and it will suggest the cheapest supplier.

In most cases residents can organise it online and it should be completed within weeks with no interruption to supply.

But he did warn customers: “The cheapest deals tend to be from smaller suppliers who are trying to improve their market share. But they are less able to protect customers from wholesale or currency price fluctuations.”

He also pointed out that 58 per cent of households had never switched, or had changed energy suppliers only once.

For those wanting free energy advice contact Ron on 01782 756995 or go to www.noreus.co.uk