npower hikes prices: what next?



This morning npower announced it would be raising its prices - and unveiled the biggest increases so far. Dual-fuel bills will rise 10.4% - including electricity price rises of 9.3% and gas price hikes of 11.1%. The change will take place on 1 December - adding an average of £135 a year to the average dual fuel bill.

So what is going on? Why are prices rising, will the other providers follow suit, and what can you do?

npower was the third of the big six energy companies to announce price hikes. Scottish and Southern Energy had started the ball rolling - announcing that on 15 November prices would rise 8.2%. They were followed by British Gas at the end of last week who said prices would rise 9.2% on 23 November.


The companies all give the same reasons for increasing prices. They say the wholesale price is rising, so they have no alternative than to pass on this rising cost to customers.

However, there are those who argue that the energy companies could easily afford to absorb some of these rising costs in their huge profits. They speculate that once more than one company has announced rises, it makes it easy for the others to follow. Adam Scorer, Director of Consumer Futures said: "Three price rises in the space of seven days confirms the impression that energy suppliers act in the security of the pack."

What next?

The experts say that this is not the last of the rises. Jeremy Cryer, energy spokesperson at price comparison website, said: "The floodgates have been well and truly opened, and with npower's price rise now confirmed, we're half way towards a full-house of price rises from the big six energy providers. Winter price hikes are unwelcome, yet unfortunately entirely predictable. But it's not over yet, and Scottish Power, E.ON and EDF will surely reveal their price hikes soon too."

What can you do?
They say that now is the time to switch to a fixed-price energy deal. Commenting on today's price increase announcement, Clare Francis, editor-in-chief at said: "In total 18.2 million customers households will now see their energy bills rise between November and December unless they take action, and millions more are likely to be hit when the other major providers follow suit. Our message is simple: switch and fix."

Cryer says: "There are dual fuel tariffs available at the moment from EDF and Scottish Power that are fixed until March 2017 and January 2017 respectively, and many others that allow you to fix well into 2015. Fixing, particularly long term, can be a gamble as you won't benefit if any price reductions are introduced, but if you're after consistent energy bills these sorts of tariffs mean that you needn't worry about further price hikes for some time."

Find the cheapest gas and electricity tariff for you

Energy efficiency

The fixed price will give you a window of opportunity for you to bring down your energy use too. By the time your fixed deal comes to an end you will have had time to bring in energy saving measures, so that in future as prices rise, your bills will not increase so fast.

According to British Gas, 12 million homes in the UK are still without adequate loft and wall insulation. Given that loft insulation can save up to £180 a year on your energy bill, and cavity wall insulation can save up to £140 a year on your energy bill, this is well worth investigating.

There are a also number of simple steps we can take. uSwitch recommends:
  • Standby - Turn appliances off, don't keep them on standby.
  • Draughts - Make sure you don't have any draughts. Seal off your windows and doors.
  • Full load - If you're using your dishwasher or washing machine make sure you have a full load.
  • 30 degrees - When you are using your washing machine, make sure you have it at thirty degrees.
  • One degree - Turn your heating down by one degree.
  • Curtains. Close your curtains when it gets dark to keep heat inside.
  • Boiling water - Only put as much water as you need in the kettle, so if you're making a cup of tea for one, don't fill it to the top.
  • Light bulbs. Use energy saving light bulbs.
  • Family - If you've got a family watch what you're children are doing - they're more likely to leave their appliances on in their bedrooms.
  • Energy grants - Talk to your energy suppliers or your local energy advisory centre. There's lots of money available for grants and financial help to install energy saving measures. The good news is that as energy providers race to meet energy efficiency targets, they are offering great deals including free insulation. In some instances you can even get cashback for taking up energy efficiency measures, so it's worth talking to your supplier about what you can get.

Had enough of your energy supplier? See if you can save by switching

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