British Gas extends energy price freeze as Scottish Power announces bills will rise by 7.8%
Households can still save hundreds of pounds by comparing tariffs and switching energy supplier
BRITISH Gas has today announced that it will extend its price freeze for customers on its standard energy tariff until August.
It comes as Scottish Power said it would be pushing up gas and electricity costs by an average of 7.8 per cent from March 31, adding an extra £86 a year on average to bills.
A total of 1.1 million customers - around a third - of Scottish Power's customers will be affected by the price hike.
Electricity costs will increase by an average of 10.8 per cent, while gas prices will go up by an average of 4.7 per cent.
The supplier blamed an increase in wholesale energy costs as the reason behind the raise.
British Gas said that despite increases in external costs, it has frozen prices.
It said its standard tariff continues to be cheaper than 95 per cent of the market.
But experts insist that households should not wait to switch supplier just because British Gas has frozen prices, as they could still save hundreds of pounds a year by moving to a cheaper deal and avoid being stung when prices do eventually rise.
Hannah Maundrell, editor in chief of money.co.uk, said: "British Gas’s price freeze is lulling customers into a false sense of security when they’re simply delaying the inevitable. My worry is that if customers wait until August to switch, everyone else will have hiked their prices already. "Customers will lose out on the chance to protect their energy bill with the cheaper tariffs around now and end up paying significantly more."
Martin Lewis, founder of MoneySavingExpert.com, said: “The most important message for all customers, including British Gas, is if you are on your company’s standard tariff, you are massively overpaying.
"For those with companies who’ve announced price hikes, after those hikes you will be overpaying on average by £311 or more than the cheapest deals on the market for the same gas, same electricity and same safety.
HOW YOU CAN CUT YOUR ENERGY BILLS
DESPITE British Gas promising to freeze prices for millions of households around the UK, consumers could still cut their bills and save money.
Around 70 per cent of people are on bog-standard expensive standard tariffs, when they should be shopping around for a cheapest deal. If in doubt, call your provider and call other providers to ask them what their cheapest fixed tariff is.
Better still, use a comparison website, like Energyhelpline.com, uSwitch or MoneySupermarket to find the very best deal for you.
By switching providers you could save hundreds of pounds a year. Bear in mind that the amount you pay for your energy varies depending on where you live.
"Not only that, those cheapest deals are fixed rates so you’re guaranteed not to face price hikes for at least a year."
The news follows rumours that British Gas, Britain's biggest energy supplier, would be following two of the big six suppliers, EDF Energy and Npower, by pushing up costs.
In December, EDF Energy announced plans to raise electricity prices by 8.4 per cent, and cut gas prices by 5.2 per cent, from March, while Npower confirmed last week that its prices would rise by an average of 9.8 per cent – adding £109 a year to gas and electricity bills from March 16.
Mark Hodges, chief executive of Centrica - the parent company of British Gas - said: "We're pleased to give our customers on standard tariffs the peace of mind that the price they're paying will remain unchanged until August.
"In the last year British Gas has consistently offered one of the cheapest standard energy tariffs."
Colin McNeill, UK retail director of Scottish Power, said: “This increase will apply to one in three of our customers, and we continue to work hard to move even more customers to our fixed price deals.
"We will be writing to all those affected, outlining the changes and encouraging more loyal customers to move to a deal that best suits them.
“This price change follows months of cost increases that have already led to significant rises in fixed price products that now unfortunately have to be reflected in standard prices.”
The supplier said new and existing customers are allowed to move between tariffs for free at any time if they are unhappy with what they're paying.
It will write to affected customers with details of the increase and a personalised quote for the change in their estimated annual energy bill.
Stephen Murray, energy expert at MoneySuperMarket said: "Regardless of which supplier you are with, if you are on a standard tariff - which is more than likely if you haven’t switched within the last 12 months - you just need to switch to a cheaper fixed deal now. There are savings in excess of £200 to be made.
“The British Gas price freeze for its six million customers still means that, based on current prices, they are overpaying by around £170 on their energy.”
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