M&S Energy has made headlines by reducing the cost of its fixed-rate tariff. The popular Fix & Save deal is now available at an annual rate of £1,139, some £63 cheaper than before. But does it represent a good deal for customers?
The cost of gas and electricity has been a cause for concern among British households for many years. Low-income families in particular have struggled to cope with rate increases, which tend to be implemented once or twice a year (and almost always at the start of the winter period). Some households are so affected by the cost of energy that they are unable to use their central heating systems when they need them.
Will the Fix & Save tariff provide salvation to fuel-poor customers? Does it represent a major shake-up of the so-called Big Six?
Probably not. Customers need to remember that M&S Energy is a division of SSE, which together with E.ON, Scottish Power, EDF, British Gas and npower make up the Big Six. In May, SSE warned that domestic gas and electricity tariffs would rise by around 9 per cent on average in October. The supplier increased rates by the same amount in October 2012.
The new fixed-rate tariff by M&S Energy is the cheapest on the market, but fixed-rate tariffs tend to be more expensive over the year than flexible rates. That may not be the case this year, however, if SSE and other leading suppliers do go ahead with plans to increase domestic tariffs.
Customers on the Fix & Save deal should be aware that it is subject to a £50 cancellation fee, so if wholesale rates happen to fall in October customers will either pay over the odds for their energy or they will have to pay £50 to switch to a new tariff or supplier.
Tom Lyon of uSwitch.com said: “Consumers should think seriously about taking advantage of this plan, which offers the best of both worlds. Not only is it the cheapest deal on the market, which will appeal to consumers looking to tighten their purse strings, but it is also fixed until the end of September 2014”.
This is not just any energy deal. This is an M&S energy deal.