First Utility launches new cheapest energy tariff

Temperatures might be falling but competition is hotting up between energy companies.

First Utility launched a tariff this week which puts it at the top of the best buy tables ahead of E.ON and Extra Energy, who have been battling it out for the number one spot.

The plethora of new tariffs shows just how keen energy providers are to lure in customers in time for the lucrative winter months.

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New best buy tariff from First Utility

First Utility’s iSave Fixed March 2016 (v37) will cost the average household £960 a year and, with prices fixed until March 2016, will see households through the next two winters.

The cheap deal is the latest in a long line from First Utility this year. It claims to have been the cheapest company on the market 23 out of the last 44 weeks and has dropped prices six times this year.

It says it’s been able to cut prices in response to wholesale energy cost reductions.

The new tariff is available as dual fuel or electricity only and a termination fee of £30 per fuel is applicable if the tariff is cancelled before the end of term. Customers need to pay by Direct Debit to get the cheapest prices; paying by cash or cheque attracts an extra charge of £2 per month or £24 a year.

However, if you're thinking of switching to First Utility should be aware of the high number of complaints about its customer service. I wrote about my experiences with the company two years ago – needless to say, I’m with a different supplier now.

Jostling for position

There's only £5 between First Utility and the next cheapest supplier, E.ON, at the top of the best buy table.

Before First Utility revved up the competition, E.ON was topping the tables, the first of the “big six” to do so for some time.

E.ON’s Energy Fixed 1-year v12 tariff costs an average of £965 a year if customers opt for paperless billing. Those that opt for paper bills will pay £10 more at an average of £975 a year.

The tariff also comes with E.ON rewards such as Tesco Clubcard points and high street discount vouchers. However, there is a cancellation fee of £5 per fuel if the customer switches away before the end of the one-year period. The cancellation fee is waived if the customer switches to another E.ON tariff.

Experts suggest the move by E.ON could mark the start of a fight back by the ‘big six’ energy companies, which have seen smaller energy suppliers dominate the best buy tables this year with customers flocking to the likes of First Utility, Ovo Energy and Extra Energy.

Extra Energy was quick in pursuit of E.ON’s position at the top spot, launching a deal at £974 a year and so undercutting E.ON’s paper billing price by just £1.

Extra Energy’s Fresh Fixed Price Dec 2015 v1 is an online-only tariff so you must be prepared to manage your account online and receive and view bills online. The early cancellation penalty on this tariff is £25 per fuel.

Best buys

As it stands at the time of writing the best buy tables contain a mixture of the big six and smaller, newer suppliers.

Source: UKPower. Based on usage of 3,200kWh of electric per year and 13,500kWh of gas per year. Shows average price across all regions. Assumes payment is made by monthly direct debit. Table only shows tariffs which are generally available across most of the UK

See if you can switch supplier and save with lovemoney's gas and electricity comparison centre

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