Act now to avoid a £400 energy bill shock

Annual energy bills for thousands of customers will rise by an average of £274 at the end of July as 14 popular tariffs expire.

Around half a million customers will be affected and some could see hikes of up to £399 per year unless they switch to a cheaper tariff.

Once the fixed-rate period of an energy tariff ends, customers are rolled onto a standard variable energy tariff but these are typically the most expensive available.

The number of fixed-rate tariffs, where the price is set for the length of the contract, ending this summer has jumped to 50, from 33 a year ago, according to the comparison website uSwitch.com.

Eight energy providers have 14 fixed-rate tariffs expiring before the end of July and if customers do nothing those with Npower could see their bills rise by £399, with First Utility £364 and with EDF Energy bills could shoot up by £360. 

Once a customer is rolled onto a standard variable tariff, their bills usually rise because these tariffs can change at any time – and are affected by price rises and falls. 

The average price of one of these tariffs from a big six provider is currently £1,138 which is significantly more than some of the cheapest fixed-rate tariffs on the market.

Most fixed deals have a penalty if you leave early which can be around £30 per fuel but energy providers are not allowed to charge this in the last 49 days of a contract.

Most energy switches take around three weeks to happen so it’s now time to start looking, if you’re on one of the expiring contracts.

Claire Osborne, uSwitch.com energy expert, says: ‘With the sun shining, it is no surprise that energy bills don’t make it to the top of the household to-do list. 

‘But with so many bills set to rocket this month, it’s vital to act now to avoid being rolled onto sky-high tariffs. Switching tariff is incredibly easy and is definitely worth ten minutes online, on the phone or on an app.

‘If your deal ends this month you could be clobbered with an increase of up to £399 per year. Don’t join the 16 million households languishing on poor-value standard tariffs.’

There has been a lot of talk around standard variable tariffs over the past six months because those with one typically pay the highest prices.

Last year the Competition and Markets Authority published the results of an investigation into the energy market which found that those with one of these tariffs were collectively overpaying by around £1.4 billion every year.

In the run up to the General Election in May, Theresa May had promised to introduce a price cap on these tariffs which would have saved 17 million households £100 per year each. However, since the election there has been no mention on whether this will go ahead.

Instead Ofgem has recently announced it is looking into introducing a cap for vulnerable customers with a standard variable tariff. However this has been widely criticised by MPs and consumer groups who are calling for a cap for all customers on these pricey tariffs.