Energy giant Npower has pulled its cheapest dual fuel tariff, sparking fears that a new round of price hikes is on the way.
Npower’s Sign Online 10 was the cheapest on the market, but its replacement tariff will cost over 10%, or £80, more on average.
The move is set against a backdrop of sky rocketing crude oil prices - a barrel now costs $120, twice that of a year ago – and it now seems a certainty that those hikes will be passed on to the consumer.
Conservative estimates are that we’ll be paying 10% more for energy come year end, but others are predicting a rise in the region of 25%, which would push the average household’s energy bill well beyond £1,200.
Target lower tariffs
The good news for Npower’s existing online tariff customers is that the price hike will only apply to newcomers.
Following Npower’s increase, EDF now offers the cheapest dual fuel tariff on the market, with its online plan costing on average £819. If you are looking to switch to a cheaper tariff, then it is certainly worth a look.
As always, take the time to compare the various offerings in your specific area before deciding, as suppliers tend to offer discounts in areas they are looking to grow their customer base.
Visit a price comparison site like uSwitch to find the best deal in your area.
Whichever deal you choose, make sure you switch sooner rather than later, as it’s entirely possible any number of suppliers could follow Npower’s lead and increase their rate to new customers.
Avoid falling into debt
With further price hikes now likely, it’s important that customers paying by direct debit adjust their payments to reflect this when it happens, or risk falling into debt with their supplier.
Price comparison site uSwitch estimates that almost 19 million (74%) households pay by direct debit, yet only 13% asked their supplier to increase their direct debit during the last round of price hikes.
Suppliers have to wait for their next account review before increasing customers’ direct debits, meaning that many consumers were left to deal with an unexpected deficit on their account.
| Standard Plan (direct debit) | Standard Plan (receipt of bill) | Online Plan (monthly direct debit) |
| SSE | £952 | £1,006 | £896 |
| EDF | £965 | £1,007 | £819 |
| British Gas | £968 | £1,055 | £880 |
| Npower | £972 | £1,056 | £877 |
| E.On | £967 | £1,063 | £891 |
| ScottishPower | £959 | £1,100 | £886 |
