Why is British Gas raising prices?
The company claims that it is losing money on the sale of electricity and that increasing policy costs, such as clean energy levies, and higher network costs, give it no choice but to put up bills.
Is this true?
Both Ofgem, the energy regulator, and the government have questioned whether energy price rises are justified. Ofgem’s supplier cost index, which tracks wholesale prices, network costs and charges to suppliers from government programmes, indicates that prices fell six per cent between February and May. The regulator says the overall price of supplying energy is 4 per cent lower than it was at the start of 2015.
What can I do to beat the increase?
The simple answer is to switch supplier. Iresa, the Nottingham-based energy firm, has the cheapest deal on the market, which is £286 cheaper for the average customer than the standard tariff offered by British Gas after the September price rise. The average price of the cheapest ten tariffs on the market is £855, a saving of £265 compared to British Gas. Any customer on one of the Big Six’s standard variable tariffs is likely to be able to save hundreds of pounds a year by switching.
How easy is switching?
Switching should, in theory, be very straightforward. You can enter your current tariff and energy usage from your most recent bill on to a price comparison website and it will suggest the cheapest supplier. In most cases you can initiate the switch online. To get the best deal, make sure that you are seeing results from all of the market rather than just a selected few suppliers that pay commission to the comparison website. Many comparison websites also have telephone services to help. The switch should be completed within weeks with no interruption to supply.