Latest offer from Npower points to 3% drop in energy prices in less than a month

10th November 2014

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Npower’s latest tariff may arrive as the second cheapest short fix for medium energy users on the market but more importantly it points to an easing back in energy prices.

Npower’s Online Price Fix January 2016 tariff will cost the average householder £968.15 a year. At this rate it costs around 3% less than the Online Price Fix November 2015 deal it replaces, which charged an average householder £1,000 a year, and was launched less than a month ago.

Consumers choosing this tariff will see their energy prices fixed until 31 January 2016. However, unlike all of the other tariffs which make up the current top 10 best buys, there is no early cancellation fee for households who decide to switch to a better deal during the fixed period.

First Utility however remain at the top of the best buys with its iSave Fixed v37 March 2016 paperless tariff, but Npower’s new tariff would actually be cheaper for average users in two transmission areas according to switching site Gocompare.

For example, it explained that an average dual fuel user in the Manweb (Merseyside And North Wales Electricity Board) area will pay £994.90 a year on the First Utility deal compared to £987.11 a year on the new Npower tariff. Similarly, average users in the Norweb (North West Electricity Board) area will pay slightly less on the Npower deal as well.

Average prices by region for current average usage figures i.e. gas 13,500 kWh per annum and electricity 3,200 kWh per annum, dual fuel, and payment method is monthly direct debit.

Jeremy Cryer, energy spokesperson at Gocompare said: “The fact that this latest tariff from Npower costs around 3% less than the tariff it replaces; which itself was launched just three weeks ago; is a good indication that lower wholesale energy prices and increased competition from smaller providers is pushing bills down.

“This tariff will also be attractive to those who feel that energy prices could fall further over the next year, as having no early cancellation charge means the customer can jump to a better deal without penalty even before the end of the fixed period. With other providers charging customers up to £30 per fuel to do the same, this Npower tariff is a good combination of competitive pricing and flexibility.”

Top 10 cheapest dual fuel tariffs including short fixes

Supplier Tariff Annual cost Early exit fees
First Utility iSave Fixed v37 March 2016 £960 £30 per fuel
Npower Online Price Fix January 2016 £968 none
OVO Energy Better Energy Fixed (Online) £973 £30 per fuel
Extra Energy Fresh Fixed Price Dec 2015 v1 £974 £25 per fuel
 E.on Fixed 1 Year v12 £975 £5 per fuel
Green Star Energy Rate Saver 12 Month Fixed 1410 paperless £1,004 £30 per fuel
Sainsbury’s Energy Fixed Price November 2015 £1,005 £30 per fuel
Extra Energy Bright Fixed Price Nov 2015 v1 £1,014 £25 per fuel
Cooperative Energy Fair and Square December 2015 £1,017 £25 per fuel
SSE Direct £1,029 £30 per fuel

Based on dual fuel, payment by monthly direct debit, averaged across all UK regions and for households with an annual energy usage of 13,500kWh gas and 3,200kWh electricity (medium user). Correct as of 10/11/2014. 

Cryer urged however that competition in the short fix market is intense with the difference between the average best buy tariff and the fifth-placed deal being just £40 a year, or less than £1 a week. However, he warned consumers should not take it as gospel that the ‘best buy’ tariff will be the best deal for them.

“Our analysis has shown that a customer’s geographic location is a significant factor in getting the best deal, so it’s essential that they compare energy tariffs based on where they live and their usage. That is the only way for consumers to get a true indication of the best tariff for them,” he added.

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