Today we have announced the difficult decision to increase our Standard Variable Tariff (SVT) from 1 October 2018. We fully understand that any price increase adds extra pressure on customers’ household bills.
We voluntarily stopped selling the SVT on 31 March so it is no longer available to new customers. If you are still on this standard tariff, the price for a typical dual fuel customer will go up by £44 to £1205, just below the average of the SVTs for the larger energy suppliers.
The reason for this increase is due to an approximately 20% rise in wholesale energy costs since early April, when we last announced an increase in the SVT. In response to rapidly rising wholesale energy costs, a number of supply companies have increased their SVT and it has also resulted in Ofgem announcing a second increase to the prepayment meter cap. Until now, we have been able to shield customer bills from the full impact of the increase in the wholesale costs because of the way we buy energy in advance.
Since we withdrew our SVT to all new customers in March, any customers who do not actively choose a new tariff upon expiry of their existing fixed-term contract will roll on to our default 12-month fixed-term Temporary Tariff. The price of this tariff for any new customers from 1 October will also increase to £1180, although it remains £25 less than our standard tariff. Our Temporary Tariff continues to be one of the cheapest default tariffs in the market.
We actively want our customers to choose alternatives to the SVT and we provide many opportunities for them to consider new fixed-term deals. We expect to have only 3 million customers on the SVT by the end of the year, down from 4.3 million at the start of 2018.
As well as providing more choice, we are striving to improve customer service levels and reduce our own costs. British Gas Rewards, our programme to reward loyalty and improve engagement, is open to all customers. To date, more than one million members are taking advantage of offers which include free energy days, tickets for entertainment venues and free boiler services.
Our customers are also taking advantage of the latest British Gas App, a convenient one-stop shop to manage energy bills and to book a British Gas engineer. In addition, we are proud to have installed more than 6.1 million smart meters, which enables our customers to benefit from automated meter reads, accurate bills and keep track of their energy use in pounds and pence. You can join the millions of people already enjoying the benefits of smart meters by clicking here.
Any customer concerned about their energy bill should visit www.britishgas.co.uk.