June 21, 2018

Eon slip a stealth 4.8% price increase through - is there more to come?

Whilst most of the country have been pre-occupied with the World Cup for the past few days Big Six energy supplier Eon were busy prepping their second price rise in six months, announcing a 4.8% increase yesterday - meaning they have added (on average) £100 to customers’ bills since the beginning of the year.

This is excessive by anyone’s standards, but Eon and all of the other Big Six suppliers have blamed increases in both the wholesale cost of energy and the levies that they are forced to pay as the reasons for putting up prices. These same reasons get wheeled out in rotation at different intervals throughout the year - usually as soon as the weather warms up, when they don’t think anyone is paying attention to their energy bills!

So why has E.on increased their gas and electricity prices?

While the Beast from the East may have caused a spike in wholesale prices energy back in March, companies buy their energy well in advance so it is stretching things to blame the increases on that event. As for the levies, these account for just c.8% of the bills so again it’s hard to believe an increase on such a small percentage of the overall bill can be used to justify such steep hikes on the overall cost.

Maybe there is another reason... and maybe that could be the upcoming price cap. The government has stated that by the end of 2018, they will be capping the default tariff that customers go on to at the end of their contract. That’s the tariff customers who ignore the emails and post from their energy supplier end up on and means they are the charged more than they had been previously.

But if these default tariffs are going to be capped then people won’t be charged that much more, so that’s a good thing, right? Well, many people have predicted that the price cap would push average prices up ahead of it taking effect, with suppliers trying to lock people in to a higher rate tariff before the cap comes in – and it looks like this could be the case. We are now anticipating a slow and steady climb between now and the autumn, pushing up average prices, when the market then suddenly be flooded with supposedly ‘attractive’ deals. That lock people in for two years with sky-high exit fees. Only time will tell if this turns out to be the case but we hope not - for the sake of consumers’ finances. 

With energy tariffs going up, should I switch?

The only way for customers to protect themselves from unsavoury supplier tactics is to sign up to an auto-switching service. It means that they’re not only saving money, but have someone else keeping an eye on the market and switching them again when a better deal crops up.

So sign up, sit back, and be reassured that Flipper is keeping an eye on things so you don’t have to.

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