The battle to win over consumers looking to protect themselves from winter price hikes is heating up with EDF Energy launching two new fixed price tariffs. The move sees the French giant going head-to-head with npower by offering a price freeze until March 2017, but undercutting npower’s price by £1. It comes as the number of switchers signing up to fixed price tariffs has rocketed to 77%, from 26% in January 2013.
The launch means that consumers looking for the longest price protection now have the choice of two tariffs – npower’s Price Protector March 2017 at £1,341 a year and EDF Energy’s Price Freeeeze March 2017 at £1,340 a year. Both are fixed for the same length of time and neither carries an early exit fee, giving customers the maximum flexibility and freedom to move on again should prices fall or a better deal emerge.
EDF Energy is also muscling in to the mid-length fixed price market with its new Blue + Price Promise March 2015 plan. At £1,183 a year it costs just £1 more than npower’s Online Price Fix November 2014, but guarantees prices until March 2015. Not only is this an extra 4 months’ protection, but it’s also enough to see consumers through one winter more than npower’s plan. Again, neither deal carries an early exit fee.
Fixed price tariffs currently compare very favourably with suppliers’ standard tariffs, making the choice to ‘fix’ very simple for those who have never switched before. Seasoned switchers may need to weigh up the benefit of enjoying the cheapest price today, but no guarantee for tomorrow, against a slightly more expensive price today, but protection from potential price hikes.
The cheapest variable deal today costs £1,116 a year, while the cheapest fixed price deal costs £1,171 a year – just £55 a year more. This additional cost for protection would be wiped out by a price hike of as little as 5%.
Ann Robinson, Director of Consumer Policy at Uswitch.com, says: “While rumours of price hikes are never welcome, consumers can take some small comfort from the fact that suppliers are battling it out to offer the most competitive fixed price deals. Many of these are also ‘best buys’, which means that consumers can enjoy the best of both worlds – a cheap price today, plus protection against price hikes tomorrow.
“The fact that suppliers are doing battle royal in this part of the market is good news for competition too. It is forcing suppliers to compete hard on the price of these tariffs and to offer increasingly attractive terms, such as no early exit fees. This is good news for consumers and serves to demonstrate what competition could deliver if the barriers were raised.”
Notes to editors
Based on a medium user customer consuming 3,300 kWh of electricity and 16,500 kWh of gas paying by direct debit with bill sizes averaged across all regions.
Based on customers switching through Uswitch.com.
Spark Energy’s Advance 2 – bill size of £1,116 based on a medium user customer using 3,300 kWh of electricity and 16,500 kWh of gas, paying by direct debit in advance, with bill sizes averaged across all regions.
Based on a medium user customer consuming 3,300 kWh of electricity and 16,500 kWh of gas, on First Utility’s iSave Fixed v9 April 2015 plan paying by direct debit with bill sizes averaged across all regions.
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