This Morning's Money-Saving Tips

Published Monday, 09 December 2013
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Eon has become the final big six energy company to hike its prices. It'll go up by 3.7% on 18 January. Yet it's still not simple as the Government's said it's reducing the 'green levy' firms must pay which should cut an average £50 off energy bills. With winter hitting what should you do - well ask Money Saving Expert Martin Lewis.

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Where are we with price rises?

All the big six companies have now announced hikes of between 4 and 10%. Of those, SSE, British Gas, Npower, and last week Scottish Power have upped prices, EDF is due on 3 January and Eon on 18 January.

What about the government's price cuts?

Green levies currently make up about 9% (£112) of energy bills. But in last week's Autumn Statement the Government confirmed a raft of plans to reduce them by £50 a year for a typical household.

To do this it's slowing down the Energy Company Obligation meaning they needn't roll out insulation measures so fast and the taxpayer will now pay for the Warm Home Discount.

The Government says households will save £50 on their energy bills, compared to what would have happened without the changes - yet that equates to roughly 3.5% per household, but of course many companies have just hiked by up to 10% so the net effect is still up.

Eon and EDF hikes, because they were later, both mainly incorporate the cut at 3.7% and 3.9% respectively.

What if I locked into a cheap fix - am I going to lose out?

That's very tough to work out as not all the companies have yet announced their policies. British Gas says it'll pass on the full £50, Eon and EDF have so far only committed to pass on £12 of it. It's still unsure with the rest.

Yet if you were listening to me on the show when I said compare and grab a cheap fix instead of sticking with your variable, you are still likely a long way ahead as the savings for most people for getting a cheap fix easily surpassed £50.

What should I be doing now to cut costs?

You can still lock into a cheap fix now, and if you go for one with no exit penalties you can leave at any time penalty free - so if prices fall you simply switch elsewhere.

Here are my top picks (based on typical users and not available on prepay):

  • Longest cheap fix: Npower's Price Protector December 2017 fixed until 31 December 2017 at £1,370. No exit fees.
  • Long cheap fix: EDF's Blue + Price Freeeeze March 2017 is fixed until 31 March 2017 at £1,340. No exit fees.
  • Cheap fix with no exit fees: Npower's Price Fix April 2015 fixed until 30 April 2015 at £1,200. No exit fees.
  • Cheapest short fix with no exit penalties: Co-Op Energy at £1,170/year fixed until 31 Mar 2015. No exit fees.

Prices vary depending on your usage and where you live so use an Ofgem Confidence Code Approved comparison site to switch, or use Martin's free Cheap Energy Club, which has a special cheap fixed comparisons section.

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