Npower joins the rest of the big six and raises prices
Npower will join the rest of the big six energy suppliers in raising its energy prices by an average of 5.3% from the 17th of June 2018. The German-owned firm has a history of sudden price increases that have caused a lot of controversy. Just last year, in 2017, the energy firm was criticised by Ofgem, the energy regulatory body, who asked them to “justify” a 15% increase in the price of electricity and a 4.8% increase in the price of gas. In 2006, the company raised its prices two times within the space of ten weeks.
Although this year's rise is on par with those of British Gas and Scottish Power, Npower currently has the most expensive tariffs on the market, which means that their customers will continue to be hit with some of the highest prices on the market.
Things don’t look set to improve either. A planned merger between SSE and Npower is facing a full-scale investigation by the CMA (Competition and Markets Agency) who fear that the merger could mean bad news for customers as reduced competition will mean higher energy bills.
Npower blames the price rises on the increase in wholesale market energy prices and implementing government initiatives. However, large companies such as Npower have the luxury of buying energy on the wholesale market up to two years in advance, meaning that they can purchase energy at lower prices and pre-empt substantial price increases.
Gillian Guy, the chief executive at Citizens Advice, said: “At a time when many energy customers are struggling with their bills, this price rise will be hard to stomach for the approximately 1 million customers affected.”
Npower says that it has written to inform affected customers of the price changes and offered them the opportunity to switch to cheaper fixed tariffs. They encourage customers to contact them as soon as possible if they are struggling to pay their energy bills.
Will I be affected by the price increase?
Only customers who are on a standard variable tariff (SVT) will be affected by the price changes. Customers who are on a fixed tariff with Npower won’t be affected by these price changes until the end of their contract. The type of tariff you are on should be written on your bills or you could call an energy expert for free advice to help you find out what kind of tariff you are on.
Standard Variable tariffs track the price of energy on the wholesale market, and so your bill changes every month. Customers are usually on these standard variable tariffs because they have never switched supplier. Also, many customers end up on these tariffs by default when their fixed tariff contract ends. These tariffs are in general terrible value for money and customers should do everything possible to switch to more economical tariffs.
The price rise can be broken down into a 6.2% increase in electricity and 4.4% increase for gas. This, in monetary terms, will mean an increase of about £64 for an average customer on one of the affected tariffs.
What can I do to avoid the price hikes and save money?
The big six rely on customers being unsure of their rights and their ability to switch to keep making money on these expensive tariffs. Customers should inform themselves about the type of tariff that they are on to make sure that they aren’t paying over the odds for their gas and electricity bills.
Customersustomers can almost always have better service and cheaper prices by moving away from the big six energy suppliers to independent suppliers. These small suppliers have the same gas and electricity, and all suppliers must abide by the same safety regulations.
Customers may also find that they will receive better customer service if they switch as the big six are notorious for their poor levels of customer service and continually rank at the bottom of the Which? consumer survey. Npower, in particular, has come last in the list of 31 energy companies for several years in a row due to poor value for money, bad customer service and delays dealing with complaints.
You can switch supplier in a matter of moments by doing a quick online price comparison or by giving us a call. The switching process is pain-free and can be done quickly over the phone. You won’t experience any break in your service and customers who are on a standard variable tariff won’t have to pay any exit fees so they won’t be penalised for switching.