‘British Gas cancelled my fixed energy tariff then asked me for £1,971 instead’

“British Gas created a new variable tariff for customers who transferred from Neon Reef when it collapsed last year. The new plan said it was ‘guaranteed until July 31’, but now my bills are rising £693 – what’s going on?”

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‘British Gas cancelled my fixed tariff then asked me for £1,971 instead’

British Gas created a new tariff for customers who were transferred from Neon Reef when they went bust last year.

I received an email on November 23, 2021, with information on the tariff unit rate, standing charge and tariff end date on July 31, 2022 with a price guaranteed until July 31, 2022.

But on February 28 this year, I received an email informing me of a price change on the April 1, 2022 in line with the price cap to £1,971.

Now they have removed the price guarantee on my account so they can put the price up on April 1.

Is this allowed?

Paul Hicks

Mirror Money’s response

When an energy supplier collapses, it’s Ofgem’s job to intervene and find a replacement provider for all households affected.

The new supplier must take on all the customers and move them on to a new plan – this is almost always a standard variable tariff – the ones covered by the energy price cap (currently capped at £1,277 a year based on average usage).

When Neon Reef collapsed last November, this is exactly what happened. British Gas took over and put 35,000 households on a British Gas tariff.

Unusually, this new offer claimed to be guaranteed until July 31, 2022. It said “end date of 31st July 2022” and “guaranteed until 31st July 2022” on the tariff paperwork. But confusingly, the small print also stated it was ‘variable’.

However, now, ahead of the price cap, customers are discovering it was not guaranteed at all, in fact their bills are about to rise by around £693 with the new price cap on Friday, April 1.

This is especially distressing for those who had already budgeted their energy bills because of the rising cost of living.

In short, it looks like British Gas suddenly changed its mind on the fixed deal and in a moment of panic, moved all customers on to standard variable tariffs instead – without any real warning.

However British Gas denies this. Instead, it told me it accidently made a mistake in these contracts.

The mistake resulted in the tariffs stating they were both ‘variable’ and ‘guaranteed’ when they can only ever really be one of the two.

The small print of the tariff also stated: “Prices may increase or decrease at any time. We will give you 30 days advance notice before we increase your prices.”

Unfortunately for everyone affected, British Gas won’t be honouring the deals. It said anyone struggling should consider applying for one of its support fund grants instead. Although these are not guaranteed.

A spokeswoman said: “Due to a system error some tariff information labels incorrectly showed price guarantee dates.

“However, it was also made clear on this label that this was a variable tariff that would be subject to Ofgem Price Cap movements.

“We appreciate that the error may have been confusing for these customers and would like to reassure them that this has now been fixed.

“We would urge any customer worried about their energy bills following the price cap increase on 1 ^st April to get in touch. We have a £4million support fund for our customers to provide grants of £250 to £750 to put towards energy debts.”

Energy bills are rising by an average of £693 on Friday, April 1, although this is based on typical usage, so use more and your bills will rise even further.

And ahead of the price cap increase, customers are being encouraged to take – and submit – a gas and electricity meter reading on March 31.

By doing so, you will ensure all energy used up until that date is charged on the cheaper rate – the current cap.

Those that do not submit a reading risk some of their energy being charged on the new higher unit price which is around £693 more expensive a year.

Justina Miltienyte, head of policy at Uswitch.com, told The Mirror: “This gives your supplier proof of how much energy was used before 1st April, when the new rates come into effect, and will ensure your bills are accurate.

“You could leave it until later in the afternoon or evening to submit your reading, to ensure as much of your energy use as possible from 31st March is calculated under the old rates.

“While there is nothing you can do to reduce the actual cost of energy, regularly submitting meter readings to your supplier is a good habit to get into, as it can help to ensure you are only paying for the amount of energy you are using.”

Disclaimer

Money Troubles aims to be informative and engaging. Though it may include tips and information, it does not constitute advice and should not be used as a basis for any financial decisions.

All information in this post was correct at date of publication.