There are signs that energy companies are starting to pass on the falling cost of oil – but consumers are being warned to look beyond the headlines and avoid standard tariffs.
Eon – one of the so-called Big Six providers – has announced a 5.1% cut in gas prices for its existing standard-tariff customers, but analysts point out that much bigger savings can be made by people who switch to a new tariff.
According to price-comparison service Gocompare, someone switching to the cheapest dual-fuel tariff stands to save more than £300 a year – 10 times the average annual figure of £32 that will be saved by Eon’s existing standard-tariff gas customers following the price cut.
Gocompare says that the “measly” 5.1% saving on gas is “the clearest message yet that the only way hard-pressed Brits are going to be able to reduce their energy bills substantially is by switching”.
Energy expert Ben Wilson adds: “While the price reduction for standard-tariff customers will be welcomed, the message from Eon is quite clear – if you really want to save big money on your energy bills these days, you need to switch to a better deal.
“Standard tariffs almost always represent the absolute worst value, and should be avoided where possible.
“Eon’s move spells out the options for households on standard tariffs up and down the country. If you stick with your current provider’s standard tariff, you might be lucky enough to get a few quid back, but if you are prepared to switch you could save over £300.”
Eon UK chief executive Tony Cocker says: “Today’s action once again makes our standard tariff the cheapest variable offering of any of the larger suppliers, and our new one-year fixed tariff is simply the cheapest product of its type on the market.”
Stephen Murray, at Moneysupermarket, says the move is “a step in the right direction”, but he echoes the message that consumers shouldn’t rest on their laurels.
“Customers shouldn’t simply accept a relatively meagre £32 reduction, when those on standard tariffs could actually be saving approximately £300 by switching providers,” he says.
“Eon is the first of the Big Six suppliers to cut prices since British Gas last July, but these price cuts are long overdue in view of the sharp falls seen in wholesale gas and electricity prices over recent months and years.
“Now it’s time for the rest of the Big Six to respond to Eon, wholesale prices and industry demand by dropping their prices too, but consumers should remain aware that the best deals can be won by switching, not by staying on standard tariffs.”