Energy firm hikes prices by shocking 20%
In a shock move, ScottishPower has announced plans to increase its retail gas prices by 19% and electricity by 10%.
The increase which is due to take effect on 1 August will affect approximately 2.4 million households across the UK.
On average, customers on a dual fuel tariff who pay by direct debit will see an increase of 48p a day on their energy bills - that's over £175 per year.
However, it did state that 700,000 customers would be protected by fixed or capped rates.
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Why the increase?
ScottishPower attributed the increase to a 30% jump in the cost of wholesale energy for dual fuel customers since November 2010.
The energy giant last increased its prices in November, when gas rose by 2% and electricity by 8.9%.
All of the big six suppliers increased their prices during the winter months and more worryingly, another wave of hikes is expected as wholesale costs continue to rise.
Other suppliers are widely expected to follow suit over the coming weeks. Both British Gas and Scottish and Southern Energy warned of energy price hikes sometime this year stating that wholesale gas prices had risen more than household bills.
Raymond Jack, Scottish Power's UK Retail Director, said: "Wholesale prices for gas and electricity have increased significantly since the end of last year and continuing unrest in global energy markets means future prices are volatile.
We understand times are difficult for many people, and we have done what we can to absorb these additional costs for as long as possible to minimise the impact on our customers".
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Is it time to switch to a fixed tariff?
With rising energy prices on the way, is it time for you to consider a fixed-rate tariff?
With a fixed rate, you pay more but in return you are protected from any future price hikes from your supplier over a set period.
However, these tariffs can be up to around £70 more expensive per year than a non-fixed deal.
ScottishPower has announced the launch of ScottishPower Direct - October 2012 offer, the cheapest online product currently available. However, this tariff is only available through the ScottishPower website.
With more price hikes coming within the coming months, it may be a good idea to look into a fixed or a capped tariff before the most competitive deals disappear, says Stephen Ratcliffe, utilities product manager at BeatThatQuote.com.
Best fixed-rate deals
| Supplier | Product | Prices fixed until | Average annual dual fuel bill |
| EDF Energy | Fixed S@ver 2 | 30th September 2012 | £1,009 |
| OVO Energy | New Energy Fixed | 12 months from Sign up | £1,050 |
| E.ON | Fixed Price v5 | 1st July 2012 | £1,072 |
| EDF Energy | Fixed Price 2014 | 31st March 2014 | £1,085 |
| Prices correct as of 08/06/2011 | |||
| Annual bills based on an average medium user (16,500 kWh gas and 3,300 kWh electricity) averaged across all regions, paying by monthly direct debit. | |||
**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**
