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BG Price Increase
BG Price Increase
British Gas has loudly trumpeted their 10% price reduction with effect from 19th February 2009 but in reality, for dual fuel tariff users, it’s potentially a price INCREASE.
Why is this? Well although the price of Gas has reduced, their price for Electricity has been significantly increased on their current tariffs!
A canny user would have already been on their Click6 tariff - and shouldn’t change without doing some calculation and examining the market carefully.
Obviously, any net increase will depend on the kWhs used and the supply area you live in. Using the figures for the ‘average’ user (20500 kWh pa Gas and 3300 kWh pa Electricity) in the Southern supply area, for Click6 tariff the figures (including discounts) come out as:
Old Click6: Gas = £756.88
Electric = £315.91
Total = £1057.79 (incl. £15 dual fuel discount)
New Click6: Gas = £739.74
Electric = £315.90
Total = £1040.64 (incl. £15 dual fuel discount)
· Gas reduction 2.26%, Electricity no change, overall reduction 1.62%
A small saving at least, I suppose, but is it still the best deal? In the past, you might have thought to change to their latest online dual fuel tariff. As Websaver1 was withdrawn from the current list on 19th February 2009 this would be its replacement - Websaver2. Although the Gas charge on this tariff has reduced (and is one of the best at the moment), the Electricity charge has been massively increased. DO NOT change to this dual fuel tariff until you have done your personal calculations. Figures for this tariff, on the same basis as above (i.e. compared with Old Click6), are:
Websaver2: Gas = £699.03
Electric = £374.38
Total = £1058.41 (incl. £15 dual fuel discount)
· Gas reduction 7.64%, Electricity increase 18.51%, overall increase 0.06%
If you are on a Websaver1 tariff then the corresponding percentages in comparing a change to Websaver2 are:
· Gas reduction 0.3%, Electricity increase 5.2%, overall increase 1.6%
- and that’s before paying the £30 penalty for leaving Websaver1!
From the above you can see that it is not worth moving to dual fuel Websaver2 if you are already on Click6 or Websaver1.
However, there is a better deal.
You will have noticed that the Gas charge on Websaver2 is much better than your existing tariff – it’s the increase on the Electricity charge that drags it down!
So, throw away your ‘dual fuel is best’ thinking and just change your Gas from your current tariff to the Websaver2 tariff – leaving the Electricity behind. You may lose the Dual Fuel discount of £15 per year but you may still be better off (there is a £30 penalty if you cancel Websaver2 before end December; Websaver1 already has a penalty until September but you would need check whether you would save more than this by changing).
For the ‘average’ Old Click6 user the percentages for doing this change are:
· Gas reduction 7.64%, Electricity no increase, overall reduction 4.05%
A winner! I could not find any dual fuel or individual tariffs that could beat this combination – at ‘average’ user consumption.
I must emphasise that as there will be very few people who exactly match the ‘average’ user consumption figures you must do the calculations based on your own consumption values (check your bills over the last 12 months) and will need to base it on the unit charges for your own supply area.
I have used the switching sites do my calculations and you should do the same. You will notice that these sites only indicate it is better to stay with a tariff by showing you a negative saving. Use a site that shows your current annual charges (based on the tariffs you quote) and that show tables for dual fuel, gas only and electricity only (e.g. energyhelpline.com). I have entered the ‘average’ user figures and indicated Websaver2 for Gas and Click6 for Electricity and the results showed that Dual Fuel Websaver2 was the best but would cost £43 MORE. I looked at Gas only and sure enough Websaver2 Gas was at the top of the list with an expected saving of zero. However, on the Electricity table the top of the list was NPower at £33 MORE with Websaver2 5th on the list at £58 MORE (i.e. no dual fuel £15 discount as well).
The preceding comments are aimed at online tariff users, particularly Click6 and Websaver users. Users on earlier Click versions should look at the comparisons immediately. Similarly, users on other tariffs who are prepared to go to an online tariff should also do so. Only Websaver2 will be available to you but it is likely it will give you significant savings.
If you think you may like to change you should consider waiting until those Utility companies who have yet to announce price changes do so.
By the way, here’s another thing. For Websaver2, BG claim “At average consumption we offer the cheapest online dual fuel tariff”. Amazingly it’s true! At 20500 kWh of Gas a year and 3300 kWh of Electricity a year, it comes top of switching sites’ lists, at present. However, it’s obvious that BG mathematicians have calculated the (cheaper) gas tariff prices and the (more expensive) electricity tariff in such a way as to achieve this. If you use 2 units of electricity a week less or 1 unit of electricity a week more then it tumbles down the lists! Clever, huh.
British Gas has loudly trumpeted their 10% price reduction with effect from 19th February 2009 but in reality, for dual fuel tariff users, it’s potentially a price INCREASE.
Why is this? Well although the price of Gas has reduced, their price for Electricity has been significantly increased on their current tariffs!
A canny user would have already been on their Click6 tariff - and shouldn’t change without doing some calculation and examining the market carefully.
Obviously, any net increase will depend on the kWhs used and the supply area you live in. Using the figures for the ‘average’ user (20500 kWh pa Gas and 3300 kWh pa Electricity) in the Southern supply area, for Click6 tariff the figures (including discounts) come out as:
Old Click6: Gas = £756.88
Electric = £315.91
Total = £1057.79 (incl. £15 dual fuel discount)
New Click6: Gas = £739.74
Electric = £315.90
Total = £1040.64 (incl. £15 dual fuel discount)
· Gas reduction 2.26%, Electricity no change, overall reduction 1.62%
A small saving at least, I suppose, but is it still the best deal? In the past, you might have thought to change to their latest online dual fuel tariff. As Websaver1 was withdrawn from the current list on 19th February 2009 this would be its replacement - Websaver2. Although the Gas charge on this tariff has reduced (and is one of the best at the moment), the Electricity charge has been massively increased. DO NOT change to this dual fuel tariff until you have done your personal calculations. Figures for this tariff, on the same basis as above (i.e. compared with Old Click6), are:
Websaver2: Gas = £699.03
Electric = £374.38
Total = £1058.41 (incl. £15 dual fuel discount)
· Gas reduction 7.64%, Electricity increase 18.51%, overall increase 0.06%
If you are on a Websaver1 tariff then the corresponding percentages in comparing a change to Websaver2 are:
· Gas reduction 0.3%, Electricity increase 5.2%, overall increase 1.6%
- and that’s before paying the £30 penalty for leaving Websaver1!
From the above you can see that it is not worth moving to dual fuel Websaver2 if you are already on Click6 or Websaver1.
However, there is a better deal.
You will have noticed that the Gas charge on Websaver2 is much better than your existing tariff – it’s the increase on the Electricity charge that drags it down!
So, throw away your ‘dual fuel is best’ thinking and just change your Gas from your current tariff to the Websaver2 tariff – leaving the Electricity behind. You may lose the Dual Fuel discount of £15 per year but you may still be better off (there is a £30 penalty if you cancel Websaver2 before end December; Websaver1 already has a penalty until September but you would need check whether you would save more than this by changing).
For the ‘average’ Old Click6 user the percentages for doing this change are:
· Gas reduction 7.64%, Electricity no increase, overall reduction 4.05%
A winner! I could not find any dual fuel or individual tariffs that could beat this combination – at ‘average’ user consumption.
I must emphasise that as there will be very few people who exactly match the ‘average’ user consumption figures you must do the calculations based on your own consumption values (check your bills over the last 12 months) and will need to base it on the unit charges for your own supply area.
I have used the switching sites do my calculations and you should do the same. You will notice that these sites only indicate it is better to stay with a tariff by showing you a negative saving. Use a site that shows your current annual charges (based on the tariffs you quote) and that show tables for dual fuel, gas only and electricity only (e.g. energyhelpline.com). I have entered the ‘average’ user figures and indicated Websaver2 for Gas and Click6 for Electricity and the results showed that Dual Fuel Websaver2 was the best but would cost £43 MORE. I looked at Gas only and sure enough Websaver2 Gas was at the top of the list with an expected saving of zero. However, on the Electricity table the top of the list was NPower at £33 MORE with Websaver2 5th on the list at £58 MORE (i.e. no dual fuel £15 discount as well).
The preceding comments are aimed at online tariff users, particularly Click6 and Websaver users. Users on earlier Click versions should look at the comparisons immediately. Similarly, users on other tariffs who are prepared to go to an online tariff should also do so. Only Websaver2 will be available to you but it is likely it will give you significant savings.
If you think you may like to change you should consider waiting until those Utility companies who have yet to announce price changes do so.
By the way, here’s another thing. For Websaver2, BG claim “At average consumption we offer the cheapest online dual fuel tariff”. Amazingly it’s true! At 20500 kWh of Gas a year and 3300 kWh of Electricity a year, it comes top of switching sites’ lists, at present. However, it’s obvious that BG mathematicians have calculated the (cheaper) gas tariff prices and the (more expensive) electricity tariff in such a way as to achieve this. If you use 2 units of electricity a week less or 1 unit of electricity a week more then it tumbles down the lists! Clever, huh.
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Comments
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well done for this research Ray, I am on click 6 online tarriff for electric i have no gas, there doesn't seem to be any electric only tarrifs for off grid gas properties as in villages... i thought this was to be looked at by offgem my avg annual units are around 11,000, I last checked BG at websaver 1 / 2 these worked out more, but I need to check again to see if I am still an existing click 6 customer, any thoughts?There are three types of people in this world...those that can count ...and those that can't!
* The Bitterness of Low Quality is Long Remembered after the Sweetness of Low Price is Forgotten!0 -
albyota,
I think you are on the best electricity tariff you can get at the moment - Click6. The next best seems to be EDF Energy online 6 which would be £45 more for 11000 kWh.
Avoid Websaver as it's dearer.
Keep watching the tariffs though as the other Utilities announce their (hoped for) reductions0 -
albyota,
I think you are on the best electricity tariff you can get at the moment - Click6.
Nice well researched post, and as you say that is the situation as at 25 Feb 2009 - just as we work out the best deal, things change!
This might be a semantic point, but of course 'you can't get' Click 6 any more - but those having that tariff can remain on the tariff. It is however far from the best electricity tariff with BG - there are some fixed tariffs that are still running.
Indeed for some Economy 7 users Click 5 was slightly cheaper than Click 6.
It is also pertinent to point out that there is no 'one size fits all solution' as, particularly for electricity, geographic variations distort the picture.
Confusion marketing!0 -
How are they allowed to get away with this sort of thing. It's always the hidden charges that hit people the most.
My dad only gets his electricity from BG as he has oil for his heating but he is on a duel fuel tariff, would it be cheaper for him to go on the single fuel.I used to suffer from lack of motivation.... now I just can't be arsed.
Official DFW Nerd Club - Member no. 1141 - Proud to be dealing with my debts :cool:0 -
elaina79,
Not sure how your Dad can be on a dual fuel tariff if he's only getting electricity from BG - it doesn't work like that. So it probably means he is already on a single fuel tariff.
Is it the best tariff? If he's on the standard tariff then it's almost certainly not! You can only find out by doing the comparisons yourself. Go to www.energyhelpline.com. You will need to know what tariff he's on and what his annual consumption is to get the best result. Also remember that the comparison is only valid at the date it is done - other utilities may lower their tariffs in the near future. So you need to keep an eye on what's going on & do the comparison from time to time. Also be aware of the increasingly used tie-ins where there is a penalty for leaving certain tariffs.0 -
my numbers on moving Gas to WS2 are that I would save £30 by Dec, with the loss of dual fuel discount also to consider. Tricky decision because of the penalty for moving away from WS2. Given possibility of price reductions this year maybe better to stay on Click6. Look at it again next winter before the high consumption gas months start.0
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Cardew, thanks for your comments and yes some ‘old’ tariffs (e.g. early capped tariffs) may still be the best deal. Which emphasises the need to do comparisons before switching and to use your personal consumption figures for the area you live in.
I was interested in your mention of Economy 7 (E7) as I had ignored it because of an article I had read on the ‘Motley Fool’ website some 18 months ago. It reported that: “But most E7 consumers are not using their energy efficiently, which is costing them a fortune. By using an average of just 37% of their electricity at night, they are spending so much during the day that they are overspending compared to people with standard meters.”
I decided to do a little further research on BG’s E7,
I found that the Click5 and Click6 tariffs are almost identical with Click6 being marginally better. I also found that the Websaver2 tariff is significantly better than both of these!
Cost figures using the national average consumption values and my own supply area tariff were:
Click5
Click6
Websaver2
Non-E7
£386
£316
£374
E7 @ 40% usage
£408
£408
£364
E7 @ 50% usage
£381
£379
£337
E7 @ 75% usage
£315
£306
£271
Conclusions:- If you don’t monitor your night-time usage (perhaps you inherited a white meter when you moved in) then start doing so.
- If you’re not using more than the break-even point of night usage electricity then change your tariff. That’s about 50% for Click5 and about 75% for Click6 (would anyone be achieving 75% night-time usage!).
- Websaver2 prices for E7 look pretty good. If you can manage about a 60% night-time usage then you would be paying about the same as the Click6 non-E7 tariff.
Once gain, I emphasize that any individual is unlikely to be using electricity at the national average consumption rate (3300 kWh per year) and you must do a comparison with your own figures and for your own supply area as tariffs differ.0 -
How are they allowed to get away with this sort of thing. It's always the hidden charges that hit people the most.
My dad only gets his electricity from BG as he has oil for his heating but he is on a duel fuel tariff, would it be cheaper for him to go on the single fuel.
Successive Govts (of both hues) have allowed them to develop as private companies with shareholders to look after usually do. The regulator should hang their heads in shame at allowing the current frankly ridiculous 'confusion marketing' business model to completely take over the market. If there was one tier for everybody then a 10% reduction would mean just that - a 10% reduction. For everybody. Would do away with the need for the ridiculous switching sites as well. It would *definitely* encourage *real* competition as well. The whole industry is a mess due to light regulation (you'd have thought the Govt would have cottoned on to what light regulation leads to by now, wouldn't you?)...Call me Carmine....
HAVE YOU SEEN QUENTIN'S CASHBACK CARD??0 -
Blast, I forgot tables don't translate too well when pasting in. Here it is again but in a readable form.
………………………..Click5……Click6……Websaver2
…Non-E7……………..£386………£316……….£374
…E7 @ 40% usage…..£408………£408……….£364
…E7 @ 50% usage…..£381………£379……….£337
…E7 @ 75% usage…..£315………£306……….£271
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