Npower and SSE tie-up given the go-ahead as watchdog says energy bills shouldn’t be affected
There had been concerns that a tie-up between Npower and SSE could reduce competition in the market
A planned merger between big six energy giants Npower and SSE has been given the green light despite concerns that it could lead to higher bills for households.
The competition watchdog had raised concerns that the tie-up could reduce competition in the market, which would likely lead to higher prices.
But the Competition and Markets Authority (CMA) has today given the deal the go-ahead after concluding that Npower and SSE do not compete closely on standard variable tariffs (SVTs) – the most common and expensive energy tariff.
Anne Lambert, chair of the CMA inquiry, said: “Many people don’t shop around for their energy.
"So, we carefully scrutinised this deal, in particular how it would impact people who pay the more expensive standard variable prices.
“Our analysis shows that the merger will not impact how SSE and Npower set their SVT prices because they are not close rivals for these customers.”
How to switch suppliers and save £300
SWITCHING suppliers is the best way you can cut your energy bills. But recent research from MoneySuperMarket found that households are throwing away up to £300 a year by not bothering. Here's what you need to do.
1. Shop around - If you're on an expensive Standard Variable Tariff (SVT) deal you are throwing away up to £300 a year. Use a comparison site like MoneySuperMarket.com or EnergyHelpline.com to see what best deals are available to you.
The cheapest deals are usually found online and are fixed deals - meaning you'll pay a fixed amount usually for 12 months.
2. Switch - When you've found one, all you have to do is contact the new supplier.
It helps to have the following information to hand - which you can find on your bill - to give the new supplier:
- Your postcode
- Name of your existing supplier
- Name of your existing deal and how much you pay
- An up-to-date meter reading
It will then notify your current supplier and begin the switch.
It should take no longer than three weeks to complete the switch and your supply won't be interrupted in that time.
For more advice read our guide on how to switch.
According to energy comparison website uSwitch, the average price of Npower's SVT is £1,230 a year compared to £1,196 at SSE.
But it's Npower that offers the cheapest deal between the two suppliers - its top deal costs an average of £961 a year compared to £1,136 at SSE.
If the proposed merger goes ahead, uSwitch said the new energy supplier would have around 12million customers - SSE has around 7.5million customers, and Npower has 4.5million.
But Victoria Arrington, an energy expert at comparison website Energyhelpline, highlights that even with the merger there's still plenty of choice for consumers.
She said: “A competitive market with lots of quality players is what can help keep energy prices low for consumers.
"With or without this merger, the energy market is still large and varied - with over 80 suppliers to choose from, consumers have loads of opportunities seek out a great energy deal."
Stephen Murray, energy expert at comparison website MoneySuperMarket, added: “It doesn’t come as a huge surprise that the CMA review has given provisional clearance to the SSE/Npower merger.
"Competition has never been as strong in the residential energy market and with increasing switching numbers recorded month-on-month, the choices for existing SSE/Npower customers are significant - nearly all of which would result in lower prices, should they decide to move away from the merged supplier."
uSwitch energy expert Emma Bush concluded: "The acid test will be whether any new company can provide better customer service and more attractive deals for energy customers."
The CMA will publish its final decision on the merger by October 22.
Households were warned earlier this year that energy bills could rocket by £300 a year unless they switch.
But an energy price cap to protect millions of households from bill rises this winter has been approved by the government.
Earlier this month we also warned households to beware fake British Gas emails that could steal your personal details.
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