14:48 23 December 2012
E.ON has joined the other 'Big Six' energy providers in announcing a price hike.
The firm pledged not to increase its prices during 2012, but like all energy firms it is obliged to give its customers 30 days' notice of any rise. E.ON's customers will see the cost per unit of their gas and electricity rise from January 18.
The average dual fuel price increase - for those who get both types of fuel from E.ON on a standard tariff - will be 8.7% (around £107 a year). The average electricity-only price increase is 7.7% while the average gas-only price increase is 9.4%.
The others in the Big Six - British Gas, EDF, Scottish Power, SSE and npower - announced their prices rises in the past few months, with increases ranging from 6% to 11%.
E.ON says that around one in six of its customers are on capped or fixed products and so are not directly affected by these changes.
Why are prices rising?
In common with its competitors, E.ON blames rising wholesale fuel costs for the price increase. It also says the cost of delivering fuel to homes has risen substantially.
Clare Francis, our consumer finance expert, said: "Price hikes from the energy companies are bad news for bill payers who are struggling with the cost of heating their homes. A recent MoneySupermarket poll showed that over a third of bill payers would put extra clothes on at home when they are cold, rather than put the heating on, because they are worried about their energy bills.
"Any customers languishing on a standard tariff should look for a better value online fixed-rate deal now to avoid paying more for their energy than they need to at the most costly time of year. There is no guarantee we won't see further price hikes this winter from the energy companies, so it is crucial you switch and fix to the best value deal to protect yourself from the impact of more price increases should they happen.
"Typical savings made by those moving from a standard deal to the best value fixed energy tariff on the market is around £248. Currently, the recommended energy deal is EDF Energy Blue+ Price Promise June 2014, costing £1,181.94 a year on average for a typical household."
Switching is easy
Switching your energy provider is a very straightforward process. It's a seamless transfer that involves no loss of service, you won't have to have any extra pipes or cables changed and your meter will remain the same: it's just the provider's name on the bill that changes.
To begin the switching process, you simply enter your address and details of your current provider into MoneySupermarket's energy comparison tool and you will instantly be able to compare tariffs from every UK provider.
Once you have decided upon a deal you should then be able to complete the switch online and your new provider will take over the service within three to six weeks.
If you are currently tied into a contract then you will have to factor in the cancellation fees, which are usually around £60 for dual fuel customers, £30 for gas and the same for electricity.
The steep increase in the price of energy has become a major political issue.
The government has published an Energy Bill alongside a number of proposals designed to simplify the market.
These include limiting the number of different tariffs energy providers can offer. The maximum they can have will be four for gas and four for electricity. One will have to be a standard tariff where the price is variable, and there will have to be at least one fixed rate product.
The government is also wrestling with how to make the energy supply market greener - something requiring substantial investment for many years to come. Critics of the Energy Bill suggest it will add £100 to annual power bills by 2020, but the government insists savings will be achieved through greater efficiency.
You can read about how the Bill could affect you here.
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