The energy deal that promises you’ll never be ripped off: Eon’s new tariff will always be £100 cheaper than the average – but should you switch?
Eon has launched a new one-year energy tariff which promises to remain £100 below the average price of all energy tariffs on the market.
It will follow the Energylinx Retail Price Index, which tracks the price of all energy tariffs across the UK, and if average prices fall the cost of the tariff will also go down.
But although it promises to be £100 cheaper than the average tariff, at £955 for those signing up today it is still more expensive than some of the cheapest tariffs on the market.
The Cap and Track tariff will always be £100 lower than the average price of all energy tariffs
The ‘Cap and Track’ tariff from Eon has been launched today and the price customers pay will be reviewed on a quarterly basis.
If after a quarter the market average has fallen, the price of the tariff will also fall so it is £100 below this figure. If the market average goes up over the quarter, the tariff will increase but will never be more expensive than the price it was on the day the customer signed up.
There are no exit fees so customers are free to leave at any point if they see a better tariff on offer.
Chris Lovatt, director of residential operations at Eon, said: ‘Eon Cap and Track provides peace of mind to customers that their prices are capped at the level they sign up to and are reviewed every three months.
‘By capping the price for the duration of the 12 month tariff, we guarantee the price the customer pays will not rise above their start price.
‘For many this takes away the hassle of shopping around for energy, especially for those who don’t feel they have the time to do so. This is one of the many ways we’re helping to boost engagement in the energy market, particularly with people on standard variable tariffs.’
The average price for those signing up today is £955 and while this is cheaper than the average standard variable rate from a big six provider, at £1,141, it’s still more than the cheapest tariffs around.
The cost for those signing up today is still £100 more than the cheapest tariff on the market
The current cheapest tariff on the market is £850 from the energy provider OneSelect, based in Farnborough and owned by EnergieFlex.
Therefore the Eon tariff isn’t the cheapest by any means but the difference with the tariff is that the price may change.
If the market average drops to an average of £900, for example, over a quarter, the price customers pay should also fall to £800 for the following quarter.
While if you have a fixed tariff, the price you pay for a unit of energy stays the same for the entire contract term.
However, given what’s been happening in the energy market, it seems unlikely prices would fall at such a dramatic rate.
Energy bills have been rising steadily over the past 12 months and five of the big six providers have announced price hikes.
Eon pushed up prices on April 26 by 8.8 per cent for those on its standard variable tariff blaming increasing policy costs and ‘other costs it doesn’t control’.
Even if the trend was reversed and prices started to fall, historically when this has happened it’s taken quite a while for these to feed through into customer bills.
Mark Vickery, spokesperson for Energyhelpline, said: ‘This tariff may have been created in response to the pre-election conservative pledge to cap rates and be seen to be fairer to the customer in a shifting market.
‘However ‘tracker’ tariffs have not been very popular in the past, with customers generally opting instead for the cheapest deal around.’