British Gas scrapping SVT is no reason to stop hunting for a better deal this winter
The energy giant’s default tariff has been widely criticised for leaving five million customers stuck on an overcharging price plan, when much cheaper deals are available.
With the UK potentially facing the coldest winter in five years, households must take action now to avoid overpaying for power.
British Gas is the third of the big six suppliers to announce the end of its SVT, with E.ON and Scottish Power recently pledging to scrap their default tariffs, while others are expected to follow suit.
The latest move follows growing pressure to curb bills, which averaged £1,123 in 2016, with Prime Minister Theresa May recently pledging to end “rip-off energy prices”.
The Government has mooted introducing a price cap on SVTs and default tariffs that customers move onto when fixed-rate deals end.
Iain Conn, group chief executive at British Gas owner Centrica, says scrapping the SVT will encourage its customers to shop around.
He says British Gas is helping customers by launching an online only tariff and offering fixed-term tariffs lasting up to three years.
It now plans to reduce the numbers going onto default tariffs by offering them at least two alternatives when their current deal ends.
Conn also called on the Government to prohibit tariffs without an end date.
GoCompare Energy spokesman Ben Wilson says further action is required as two thirds of all UK households are paying too much for their gas and electricity by being on SVTs: “The British Gas change does not come into effect until April, after peak energy usage season is over. The move will not signal the end of bad deals, customers will simply switch from an SVT to a SBT, or ‘slightly better tariff’.”
Wilson says the move could save customers up to £75 a year, but they could save a lot more by switching to a best-buy deal: “Take 10 minutes out of your day to shop around online and compare tariffs and features from multiple suppliers.”
If you find a better deal, switching is quick.
Wilson adds: “Enter some details, click a few buttons, and your new supplier will handle the rest.”
Stephen Murray, energy expert at MoneySupermarket.com, says households need to be proactive rather than relying on the energy suppliers: “As the cold weather starts to bite, we would remind people to take matters into their own hands today and switch to a competitive fixed-rate deal to secure savings of £250 or more.”
A total of 32 fixed-rate energy deals will expire at the end of this month and a similar number in December, with customers paying as much as £300 more as a result, according to MoneySupermarket.
Fixed tariffs from four of the big six suppliers expire this year, EDF, Scottish Power, Npower and British Gas, as well as fixed deals from emerging suppliers First Utility, Engie and Sainsbury’s Energy.
Many customers will be rolled onto more costly tariffs at the worst possible moment as winter weather sweeps the UK, Murray says: “Now is not the time to be languishing on an expensive standard variable tariff or inadvertently rolling onto one at the end of a fixed-rate deal because you have done nothing.”
There are now more than 60 active energy suppliers on the domestic UK market and Richard Neudegg, head of regulation at uSwitch.com, says competition is the best way of driving prices down, rather than Government-imposed price caps: “The Government must be careful not to halt positive initiatives in going blindly for heavy-handed price regulation.”