Beware the great British Gas rip off

Sarah Coles
British Gas to cut bills
British Gas to cut bills



You could be paying more than 20% over-the-odds for your energy from British Gas. It goes to show just how badly you are being ripped off if you have stuck with the Big Six energy providers standard tariff, and why it's vital we all consider switching.

British Gas unveiled its new fixed tariff at the end of last week. The British Gas Price Promise February 2016 tariff will cost the average medium energy use household £1,099 a year.

Those who have had their eye on the energy market for some time won't be particularly surprised to earn that it's not a hugely competitive tariff. Gocompare points out that it costs £186 more a year than Extra Energy's Fresh Fixed Price January 2016 v10 tariff.

Switch energy deals: see if you could save

However, what might come as something of a surprise is that on exactly the same day, Sainsbury's launched the Fixed Price February 2016 and the Price Freeze February 2016 - guaranteed to 29 February 2016 - exactly the same date as the British Gas tariff.

The Sainsbury's Energy Fixed Price February 2016 tariff will cost the average medium energy use household £922 a year. That's only £9 a year more expensive than the Extra Energy deal - which makes it the seventh most competitive short-term fix on the market.

What makes this deal particularly noteworthy is that Sainsbury's doesn't have its own energy provider: it's just a 'white label' deal offered by British Gas with the supermarket's own branding on it.

British Gas customers are paying almost 20% more just to have the words 'British Gas' at the top of their bill instead of 'Sainsbury's'.

The only discernible difference between the offerings is that there's a £30 cancellation fee if you leave the Sainsbury's deal early.
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Rip off

British Gas would appear to be cashing in on the fact some people are willing to stick with the company because they recognise the firm, trust it, and have decided to stay loyal to it.

Such a view is wholly misguided - and their loyalty is rewarded yet again with another terrible deal.

Jeremy Cryer, energy spokesperson at Gocompare.com, said: "These new tariffs demonstrate why customers must look beyond the Big Six to get the best energy deals. To all intents and purposes Sainsbury's Energy customers receive the same gas, the same electricity and the same service as British Gas customers but British Gas customers are paying a lot more for it. It's a clear example of an established 'Big Six' provider trading on its brand to charge customers through the nose."

In fact the performance from the Big Six in the past couple of weeks should have been enough to show any of us it doesn't pay to be loyal to them. Their price cuts in the face of wholesale cuts have been pitiful, with EDF announcing a 1.3% cut - at a time when the wholesale gas price has come down 20% - or £62 per customer per year.

Switch energy deals: see if you could save

Challenger brands

It goes to show how vital it is to check the price of 'challenger' brands and the newcomers. As Cryer says: "The best way for consumers to hit back at being milked of money by the energy fat cats is to ditch their expensive tariffs and switch to a more competitive deal from a less greedy challenger."

The statistics show we're starting to do this. Energy UK found that 1.3 million customers switched from a big player to a smaller one in the past year - which accounts for 41% of switches. We're being rewarded for it too. Figures from uSwitch.com show that we're saving an average of £228 with each switch - up from £138 in May 2012.

So if you haven't joined the switch, now is the time to compare prices. GoCompare has calculated that the five cheapest tariffs on the market at the moment are all short-term fixed deals from challenger brands. They are:

Extra Energy Fresh Fixed Price January 2016 v10 - with a typical customer paying £913 a year
first:utility iSave Fixed v44 March 2016 - £919
Extra Energy Bright Fixed Price Jan 2016 v9 - £919
Extra Energy Clear Fixed Price March 2016 v5 - £919
Ovo Better Energy Fixed (Online) - £920

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