Just 4 energy deals that cost less than £1,000 a year

MILLIONS of householders face punishing bills to keep warm this winter after the number of energy tariffs charging less than £ 1,000 a year slumped from 89 to just four.

Figures from MoneySuperMarket show the average annual cost of the 30 best value tariffs has risen by 21 per cent since April – up from £864 to £1,042.

The personal finance experts said the driving force behind the increasing cost of heat and light has been a sharp rise in wholesale energy costs since last winter.

But it may also be a result of the Government’s cap on the expensive standard variable tariffs (SVT), which more than half of households are signed up to.

Earlier this year, industry regulator Ofgem warned energy firms might try to recoup losses suffered due to the cap – which comes into effect in December and reduces SVTs by an average of £75 a year – by pushing up prices on other tariffs.

None of the four deals less than £1,000 a year offers the protection of a fixed rate tariff, which means they could rise at any time. Currently, the cheapest variable rate

‘Price cap could halt market competition’

is the ‘100% Green’ tariff from Pure Planet, with an average annual bill of £921.

Surprisingly, the cheapest fixed rate deal is with British Gas, rather than one of the new small energy firms lauded as offering a price challenge to the big suppliers.

Its ‘Energy Plus Boiler Cover October 2019’ deal runs for one year and comes in at an average of £1,020. But customers need to get a smart meter to be eligible.

Lawrence Slade, of industry trade body Energy UK said: ‘No one takes the decision to increase prices lightly but wholesale costs, which are out of suppliers’ direct control, have risen by more than 20 per cent this year forcing suppliers across the market to raise tariff levels.

‘The proposed price cap will pose a significant challenge for many suppliers and there is a concern that over the next year it could halt the ever-growing competition in this market and have unintended consequences for customers.’

Stephen Murray, of MoneySuperMarket, said: ‘If you are one of the 54 per cent of people still languishing on a standard variable tariff, you are almost definitely paying too much.’

He added: ‘In order to make savings and bring their prices down, they [customers] have to switch.’