British gas has become the second supplier to heap misery on its customers, hiking its gas prices by a whopping 35% and electricity by 7%.
Dual fuel customers on the supplier’s standard tariff will see their bills increase by an average of 25% to around £1,322.
The move comes just days after EDF announced it will charge 22% more for gas and 17% more for electricity, and it is simply a matter of time before the remaining suppliers follow suit.
So what can you do to help minimise the shock of soaring prices? Well, you have two options, which we look at in detail here:
Option 1: Fix for the future
The popularity of fixed or capped rate energy deals is surging - price comparison site uSwitch reckons that four out of ten people switching now choose one of these tariffs.
This is hardly surprising, given that soaring gas prices show no sign of abating, and the value they offer is clear to see: Had you locked into the British Gas Price Guarantee December 2009 Dual Fuel deal before the latest price rise, your energy bills would be fixed at £1,073 for more than a year. That’s around £250 less than British Gas standard tariff customers are paying today.
Of course that deal has since been pulled, but the good news is E.ON is still offering a decent capped tariff: The E.ON Energy Saver Version 4 Dual Fuel deal is capped at £1,102 until 1 October 2009. If that sounds good to you, it’s essential you act immediately, as it probably won’t be around for long.
Another alternative is the British Gas Fixed Price 2011 Dual Fuel deal, which is fixed until September 2011 at £1,240. This could prove a very good deal if prices continue to rise at their current rate, but it does come with a fairly high premium that could cost you if prices level off.
There’s also the fact that you’ll be stuck with the same supplier for a very long time, and that supplier happens to have by far the worst reputation for customer service.
Current fixed/capped deals on the market
| Supplier | Price | Fixed until | Additional Information |
| E.ON Energy Saver Version 4 Dual Fuel | £1,102 | Capped until 1st October 2009 | Cancellation Charge of £35 may be applied if the plan is cancelled before 1st October 2009. |
| E.ON Price Protection v17 2009 Dual Fuel | £1,102 | Capped until 1st October 2009 | Receive 1 Tesco Clubcard point for each £1 spent. |
| British Gas Fixed Price 2011 Dual Fuel | £1,240 | Fixed until September 2011 | |
| EDF Energy Price Protection 2009 | £1,229 | Fixed until 31st October 2009 | Early termination fee applicable of £20 for electricity and £50 for gas |
Average bill size for a medium user profile consuming 3,300kWh of electricity and 20,500 kWh of gas per annum, paying by fixed monthly direct debit. All bill sizes averaged across all regions.
Option 2: Gamble with online
If you’re prepared to risk being exposed to the gas price fluctuations (or simply hate the idea of being stuck with one supplier for a long time) then you should compare prices and find the cheapest online tariff in your area.
Hopefully most of you will have taken our advice and done so a while ago - the standard tariff is a rotten deal, regardless of the supplier, as it costs around 17.5% more for no tangible benefit.
If you are a British Gas or EDF customer, you may want to hold off switching to another supplier’s online tariff for the moment, unless you’re prepared to face the possibility of having to switch again in a month or so.
There is no doubt the other energy giants are going to hike their prices as well, so just because one may look cheaper now, it could just as easily end up being the most expensive in a few weeks.
Some other cost saving measures
Of course ensuring you’re on the cheapest possible tariff is only part of the solution.
If you want to keep your energy bills at a manageable level, you will also need to monitor your energy consumption and take steps to minimise it. We’re not talking about throwing out the washing machine or convincing the family to enjoy “rustic” candle lit dinners every night, but rather simple measures you can take to minimise your consumption.
You can read more about this here and here.
