Major energy firm is giving thousands of customers £50 free credit – but there’s a catch
A MAJOR energy firm is giving thousands of customers free cash if they switch from another supplier.
Ovo Energy is rewarding newbies with £50 in free energy credit directly to their accounts upon switching to the firm.
The credit will be paid in two instalments. New customers will receive £25 when they first join and a further £25 after being with Ovo for three months.
But there are a number of catches and one of which is that the offer is limited to the first 15,000 customers to switch to the supplier and ends on March 31.
Ovo Energy told us that thousands of credits are still up for grabs.
Prospective customers need to get a quote from Ovo and switch from their old supplier - this usually takes five working days.
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After that, you'll begin to receive the energy credits - but there's a major catch to this reward.
The offer is only open to new Ovo Energy customers and can't be claimed if you switch tariffs within the company.
Customers must also opt to pay their bills by monthly direct debit.
As a result of this policy, those on prepayment meters wishing to switch will not be entitled to the free energy credit.
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Neither will customers who opt to pay for their energy on receipt of bills with a credit card, debit card or standing order.
Customers will also need to initiate the switch directly through Ovo's website and not through third-party price comparison websites.
At the moment, no other suppliers are currently offering incentives to switch but more could do in the future.
Is this deal worth it?
Natalie Mathie, energy expert at Uswitch said: "It's great to see that energy suppliers are once again starting to offer incentives for customers to switch, even if there are no fixed deals on the market currently.
"OVO Energy is the first supplier to offer a free credit incentive directly to consumers. This £50 free credit deal could be a good option for consumers looking to move energy suppliers.
"The good news is that you will not be locked into the deal, and although you need to stay with OVO for three months to receive the second instalment of £25 credit, there are no fees to switch away after that period.
Whenever a customer considers switching their energy supplier they should always think about the following things, according to Ofgem:
- A supplier’s customer service.
- If the offer is the cheapest, environmentally friendly or flexible to leave without an exit fee.
- If you can get cashback or other free incentives as part of your switch offer.
- If there is a switching guarantee. Some suppliers offer this to help you switch with confidence.
Which? recently ranked energy suppliers on customer service, complaints and the level of support they give.
Ovo Energy ranked sixth out of 15 suppliers and received a 63% approval rating, according to customer feedback.
So if you're still set on switching you may be asking whether price is still relevant - after all, the only reason most people used to switch energy firms was to get a better deal.
However, the price incentives of switching have been wiped out since wholesale gas prices started rocketing in 2021.
As a result of this, the Chancellor announced that the government’s energy price guarantee will be extended at the current level for another three months.
It means a household with typical usage pays no more than £2,500 a year.
So if you're currently on the standard variable tariff and are considering the switch - tariff prices won't be the major pull because they're all capped at a similar rate.
But if you're coming to the end of a cheap fixed energy deal it might be worth considering this offer for free credit.
It is hoped that energy bills will start to fall in July and more firms will begin to roll out new fixed tariffs which beat the current cap.
Natalie said: "If suppliers start offering competitive fixed tariffs later in the year, you could still switch from Ovo to a different deal if you think that is the best option for you."
When could cheap fixed energy deals return?
Experts have already said that cheap fixed energy deals could return within a matter of weeks thanks to falling wholesale gas prices.
Analysts at Energy consultancy Cornwall Insight said last month that millions of domestic customers could be offered more competitive deals soon.
The return of these deals would also give households the freedom to switch suppliers and lock in potentially cheaper prices.
Fixed-rate energy tariffs give customers bill stability over a set period.
Locking in the price means you can avoid bill hikes during that time. But you could end up stuck in a deal paying more if prices fall.
Richard Neudegg, director of regulation at Uswitch previously told The Sun: "As we are seeing wholesale prices fall, it should start to be possible for suppliers to offer fixed deals that can beat the energy price guarantee level of £2,500 due from April."
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Cornwall Insight's research suggests that the average bill could fall below this, to £2,200 from July.
But for now "it remains to be seen how competitive these deals will be, especially with the regulations currently making it even more difficult for suppliers to offer decent prices," according to Neudegg.