Independent research has shown that over the past month, five of the UK’s Big Six energy providers have increased prices for their cheapest tariffs by more than 15%.
Since September E.on, EDF, SSE, Scottish Power and Npower have all been found to have raised prices for their cheapest fixed rate plans by an average of 16%, amounting to an increase of nearly £130. This brings the average cost of the cheapest deals up to just over £800 a year. The largest increase was seen in E.on’s cheapest fixed rate deal, which now costs almost 35% more than it did in September this year. SSE were next highest, with their 24% increase bringing the price of their cheapest deal up to £970 compared to E.on’s £1,015.
British Gas were the only member of the Big Six to not raise their prices over the month, but even after rises form the others, their prices remained the highest, with an average annual bill of £1,044.
Energy companies have cited a variety of different factors in their justification of raised prices, including increasing wholesale costs. This has partly been driven by the falling value of the pound against the dollar that has happened in recent months, since prices for energy commodities such as oil tend to be measured in the latter. According to Sky News, whole has costs have gone up by some 34% for UK companies since the EU referendum.
Some smaller energy companies raised their prices as well, but those who did did so by smaller margins.
All in all, while the Big Six’s price push will serve to increase their profit margins, it is likely that more and more customers will now be looking towards smaller providers, such as Economy Energy, whose fixed rate deal ranks as the cheapest available in many areas of the country.
Energy UK issued a statement urging customers to make sure they shop around when looking for a new tariff, and made it clear that while prices can go up based on various underlying factors, providers are under pressure to remain competitive, given the ease with which customers can switch.
“Today, consumers can choose from over 40 suppliers offering a wide range of deals.
“That level of competition means that, although fixed deals need to reflect underlying costs, suppliers will always offer the most competitive tariffs they can.
“However, the easiest and best way for customers to find the right deal for them is to switch tariff or supplier by using an Ofgem accredited price comparison site.”