Update 16 October: Since this blog was written British Gas, Scottish Power and Npower have all announced 6-9% price hikes due to hit in the next couple of months.
Eon’s marketing currently touts it "won’t raise prices this year". Well, we’ve heard these type of pledges before. What usually happens, a very short time after the pledge ends, is the prices jump.
Last week my hackles were raised during my Radio 5 Live Consumer Panel slot (Thursdays at noon for an hour).
Sara Vaughan, Eon’s director of strategy was on. In response to Shelagh Fogarty’s question â€“ "will you be putting your prices up this winter?" â€“ she proudly said: "No, we’re promising not to raise prices this year."
Now I don’t know about you, but for me, winter doesn’t end when the pledge does, on 31 December. So I picked her up on it, checking whether the pledge extended to January and February.
It didn’t. To up the ante, I then offered a Â£1,000 charity bet with Eon that it’d raise or announce price rises in January.
The bet was refused (draw your own conclusions) and she accused me of "trivialising" energy prices. I wasn’t. I was trying to point out these type of promises can be relatively flaccid.
The British Gas representative at least honestly said he thought prices would have to go up, though told us: "We’re doing everything we can to prevent having to do it."
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While price promises are not bad in themselves, they are over a short period, let us say, of ‘trivial’ importance. They do, however, give customers a false sense of security, even more so if they encourage people to switch to a provider offering one.
- A promise that a price isn’t going up doesn’t make it cheap, anyway. For the best price for you, always check with an energy comparison site.
- Energy companies need to give 30 days’ notice of price hikes. So barring SSE (which hikes prices by an average 9% next week), the earliest any company could hike costs is early November, so there’s not much of an advantage in signing up with Eon now.
- Anyone switching to Eon for this promise, as it takes 4-8 weeks to activate a new tariff, would have very little time on the "no price hike" promise.
- The promise is "no price hikes this year". So technically, it could announce a hike in November to start on 1 January.
- January and February are the coldest months of the year, but the price promise does not extend to then.
- Most people who switch stay with that provider for years, so the few months of price holds is of limited impact.
I would welcome a more meaningful price promise from energy companies of "anyone who switches to us will not have their rates hiked for the first six months after the switch is activated".
In fact, I’d like regulation on this â€“ so you’re guaranteed the price you sign up at for a period of time.
The energy companies may say this is too complex, but it isn’t â€“ every credit card company operates its 0% deals this way. I doubt it’s beyond the limits of technology.
So I thought I’d ask your opinion. Will Eon raise prices? And if so, when? Would you have taken my bet? Reply below.
Related past blogs: