Scottish Power price hike
Scottish Power, owned by Spanish energy firm Iberdrola, will join the rest of the big six by raising their prices today by an average of 5.5%, matching energy giant British Gas with one of the highest increases on the market.
The move will affect one-third of Scottish Power customers, around 960,000 households, threatening to raise the average bill by about £63. Among the big six energy suppliers, Scottish Power has the lowest number of customers on high priced variable tariffs. However, this won’t console customers who will start feeling the pinch from today.
Scottish Power’s reasons for the price changes are similar to the other big six suppliers. Scottish Power's CEO retail Neil Clitheroe said:
Unfortunately our standard variable prices are increasing. This reflects rising wholesale energy costs and compulsory non-energy costs. Two-thirds of our customers are unaffected. We will be contacting all customers affected by the price change to give them the opportunity to move to a fixed price tariff alternative and avoid this increase
Big energy suppliers such as Scottish Power should be able to plan with foresight the price of energy to avoid sudden substantial price increases such as these. The rises are way above the current rate of inflation and many energy advice services and government bodies have labelled them “unjustified.”
Will I be affected?
Customers who are on a fixed rate tariff with Scottish Power won’t be affected by these price changes until the end of their contract. Only those who are on a standard variable tariff (SVT) will face higher bills. If you are unsure if you are on one of these tariffs, it’s easy to find out by looking at your statement or giving us a call.
Standard Variable tariffs mean that your bill will change with the price of electricity on the wholesale market. Customers often find themselves on standard variable tariffs because they have never switched supplier. Also, many customers are on these tariffs by default when their fixed tariff contract ends. These tariffs are in general some of the most expensive on the market and customers should do everything possible to switch to fixed tariffs.
Customers who are on a standard variable tariff dual fuel will find their bills will increase an average of 5.5%. Customers who pay quarterly will see a rise of 6.9%, and those who pay monthly will see their bills rise by 5.6%.
This is due to the removal of the dual fuel discount (previously £10.50) and the increase in the unit rate of both electricity and gas.
What can I do to avoid the price hikes and save money?
The most important thing is that customers mustn’t be complacent. The big six energy suppliers rely on customers’ fear of switching to continue charging disproportionate prices. Many people feel that if they change they will have more problems with their energy supply or even be in danger of being left without electricity at all. This is not the case. All gas and electricity suppliers use the same gas, the same electricity and have the same level of safety. The only difference is the name of the company on your bill and the customer service you receive.
If you think you are going to be safer sticking with one of the big six for their excellent customer service, then you would be surprised. In fact, in the recent Which? customer service survey the big six energy suppliers came placed at the bottom of the table. By changing your supplier you are not only guaranteed to have cheaper energy, but you are also guaranteed to have better customer service.
Switching is more straightforward than you think and can be done quickly over the phone, or by doing a comparison online. The switching process is also simple. Customers who are on one of the variable tariffs that are affected won’t have exit fees so they can change companies whenever they want without paying any penalties.