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Are energy tariffs getting simpler?

By MoneySupermarket.com  |  Posted: July 03, 2012

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Energy suppliers are notorious for their complex tariffs that leave customers struggling to work out the best deal for their gas and electricity. But there have been signs that some firms are getting the message and simplifying their approach to pricing.

British Gas is the latest provider to streamline its tariffs, so here we take a look at what's on offer from the 'Big Six' energy providers to see if genuine improvements are being made.

British Gas

British Gas is the latest of the Big Six to announce a whole new range of energy tariffs for UK customers. It says these have been designed to make energy bills easier to understand and pricing policies more transparent.

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The new product names reflect this transparency with 'Clear and simple' replacing the 'Standard' tariff while the others on offer, 'Discount Variable August 2013', 'Online Variable August 2013' and 'Fixed Price May 2014', all do what they say on the tin.

Although this appears to be a step in the right direction to rebuilding consumer confidence, existing British Gas customers might not be too happy to find out that they will not automatically be moved on to the new tariffs as, at the moment, they're only available to new customers.

In addition, the new tariffs are not competitively priced compared to those offered by other energy companies. The new 'Clear and Simple' tariff, for instance, although around £20 cheaper than the old 'Standard' tariff, is still £38 more expensive than the cheapest standard tariff offered by EDF Energy.

EDF Energy

Back in March, EDF Energy launched its 'Blue + Price Promise' tariff with the intention of creating a tariff focused on the needs of the customer, and it has also streamlined its offerings to make life simpler for its customers.

'Blue + Price Promise' locks in prices until September 2013 and, in an unprecedented move, will also alert customers if another supplier has a tariff on offer that is more than £1 per week cheaper.

EDF Energy's 'Standard (Variable)' tariff offers an annual dual fuel discount and comes with no minimum contracts or cancellation fees. But prices can fluctuate, meaning customers on this tariff are at the mercy of the dreaded price hike.

For anyone wanting to avoid price increases for longer, EDF Energy offers a 'Fix to June 2014' tariff that ties prices down until June 2014 and also offers discounts of up to £85 for managing accounts online and paying via direct debit.

All price plans are subject to an early exit fee unless otherwise stated.

E.ON

E.ON also offers a range of fixed price plans, variable price plans and green energy plans that can seem confusing in comparison to the offerings of some other providers.

Its fixed plans include 'E.ON Fixed Price April 2014' that holds prices until April 2014 and 'E.ON StayWarm', which is a tariff exclusively for the over-60s that offers fixed bills for 12 months.

E.ON then has seven further variable price plans including 'E.ON Energy Discount 2013' which offers an additional 3% discount on top of standard prices for 12 months, and 'E.ON SaveOnline 12' which is its cheapest price plan and is guaranteed to be at least 2% lower than its standard energy prices.

'E.ON EnergyOnline' offers an additional 2% to customers for managing their account online while 'Age UK Energy' is another plan aimed at the over 60s and comes with a cold weather payment of £10 per year and £20 per year for the over 80s.

Again, unless otherwise stated all annual price plans are subject to an early cancellation fee.

npower

Npower also has a number of tariffs under different categories and so is not quite as straightforward as some of its rivals.

The 'Standard' tariff has a £100 dual fuel and direct debit discount and no early exit fees, and there is also a 'Go Save' tariff that offers a £110 discount for dual fuel customers paying by direct debit.

Npower also offers 'Price Guarantee' tariffs in the form of 'Go Fix 12' that fixes prices until August 2013 and offers £100 discount for paying via direct debit. Then there is 'Energy Discount December 2013' that caps prices until December 2013 before reverting to standard variable (off-line) prices, meaning that prices are not subject to any online discounts.

Then there is 'Bill Saver August 2013' which offers discounts on both gas and electricity until August 2013 and also on the monthly cost of central heating care. Unless stated, these tariffs are subject to early exit fees.

Scottish Power

Scottish Power has a range of tariffs under the sub-headings 'Guaranteed', 'Green' and 'Discounted' and so does not quite have the simplicity of the four price plans offered by SSE.

There are four 'Guaranteed' price plans, each of which fixes prices until at least 2013. 'Platinum Fixed' and 'Online Fixed Price Energy' both ensure there will be no price rise before July 2013. The former also includes boiler and radiator care as part of the package.

'Fixed Saver Energy' locks in prices until September 2013 while 'Fixed Price Energy' ties in prices until April 2014. Scottish Power also offers a discounted package called 'Online Energy Saver' that holds prices until July 2013 and can save 8.3% against its standard tariffs.

All Scottish Power tariffs are subject to an early cancellation fee that varies depending upon the price plan you are on.

SSE

SSE claims to have simplified its pricing policy to take some of the confusion out of choosing the right energy deal.

It has narrowed its tariffs down to just four options, all of which will come with a 7% discount if customers choose to pay via direct debit, and it says there will be no price increases until at least October 2012.

'Standard Energy' is its simplest tariff as it has no tie-ins and no cancellation fees while 'Fixed Discount April 2014' does what it says and offers a fixed discount of 2% on the Standard Energy unit price until April 2014. There is a £50 cancellation fee for leaving this plan early.

Its '2 Year Fixed Price Plan 2' fixes energy rates at today's prices for two years to safeguard against future rises while 'Price Fix 8' fixes energy prices for three years. Again, both of these price plans are subject to a £50 early cancellation fee.

Switch and save money

While some providers are streamlining their price bands to make things easier for us all, others are still offering a mind-boggling array of tariffs that can make comparing energy deals a real headache.

However, MoneySupermarket's energy comparison tool will instantly compare the latest deals on offer from a range of providers, including those not in the Big Six, to ensure you find the best value deal.

And the disparity in prices between British Gas and EDF Energy highlights how much can be saved by simply comparing what is on offer and shopping around for the best energy deal.

If you are looking to switch energy provider then summer is optimum time to do this before the winter months, and potentially any associated price hikes, set in.

Scott Byrom, MoneySupermarket's energy expert, commented: "This is a good time for people to evaluate their energy needs and look for the right deal before we head into the colder and more costly winter months as it takes six to eight weeks for your supply to change over. The typical saving through MoneySupermarket by changing energy tariffs is around £200."

Although it currently takes between six and eight weeks to switch provider, Ofgem has launched a consultation to ensure that switching takes place within three weeks, as per European Union requirements.

So switching could be about to become even easier.

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