Energy fix warning for charity Scottish Power with high exit costs
- Energy company Scottish Power has teamed up with the charity Cancer Research UK
- Scottish Power has launched an energy deal that is cheaper than the price cap
- But the tariff could cost Britons money in the long term and entail high exit costs
A new energy tariff from Scottish Power and the charity Cancer Research UK could cost struggling families hundreds of pounds extra a year for gas and electricity.
The energy giant has launched a one-year fixed tariff called ‘Help Beat Cancer Flexi April 2025’.
It is the result of a partnership with Cancer Research UK and offers a rate equivalent to a typical annual bill of £1,799.
The company claims this represents a saving of £129 compared to the current energy tariff with a price cap – set by regulator Ofgem – which is £1,928 for average use.
Burning through it: the Scottish Power deal may not be value for money in the long term
However, industry analysts Cornwall Insight predict that the Ofgem’s price cap will amount to the equivalent of £1,620 from April 1, before dropping again to £1,497 in July.
If these figures are correct, everyone who signs up for the Help Beat Cancer tariff would have to pay hundreds of pounds more for gas and electricity over the next year, compared to millions of others.
To escape the tariff, customers must pay a fine of £150 per fuel – a total of £300.
Consumer and charity campaigners have warned families against entering into fixed-rate contracts that are likely to be more expensive than the lower price cap expected from the spring.
They are also critical of any deal that involves high exit costs.
Jonathan Bean, Fuel Poverty Action policy director and Speaker of Parliament, said: ‘It is shocking that ScottishPower and other energy companies are trying to keep people locked into high prices for longer.
‘This is blatant profiteering, and Ofgem must take urgent action to stop people being exploited.’
He questioned Cancer Research UK’s decision to back the tariff and suggested it may not have realized the implications.
‘It is a shame that cancer research is being used in this way.’ said Boon.
‘It is better for people to save money when prices drop from April, and then immediately donate what they can afford.’
Simon Francis of the End Fuel Poverty Coalition, which speaks on behalf of a range of charities and campaign groups, warned against signing up to a tariff with high exit costs.
He said: ‘No one should set a fare with an exit fee of more than £80.’
When it launched the tariff, the energy giant said: ‘ScottishPower has launched one of the most competitive energy tariffs £129 below the price cap, based on a typical average usage of dual-fuel direct debit customer in Ofgem.’
It strengthened the charity relationship, adding: ‘Scottish Power is committed to working with Cancer Research UK because together we have the energy to help beat cancer.’
The deal’s fine print makes it clear that the maximum donation to the charity is £10 per customer – or around 84p per month on a pro-rata basis.
A spokesperson for Scottish Power defended the tariff, saying: ‘Our fixed-term contract, launched on January 19, offers new and existing customers the opportunity to lock in their energy costs for a year at a rate 7 per cent below the price cap, based on Ofgem estimates of the average usage of a typical dual-fuel direct debit customer.
‘Each customer has their own individual circumstances and we offer a range of rates to suit the needs of different customers.
‘A fixed-term tariff can help people plan their energy costs over a period of time – especially after the extreme market conditions of the past two years – while others may prefer variable or usage-based tariffs, where prices can vary. change in line with global developments. wholesale prices or depending on the time of day.’
Caro Evans, Partnerships Director at Cancer Research UK said: ‘Scottish Power’s Help Beat Cancer energy tariff will help raise money for our life-saving cancer research.
‘Scottish Power is making a donation to Cancer Research UK on behalf of the customers who choose this tariff, and we are grateful to them and their customers for supporting us in this way.’
How do I find out if a fixed rate is a good price?
To find out whether an energy deal (fixed or otherwise) is cheaper than you pay now, compare the unit rate and the fixed charge with what you currently pay.
The average home pays rates capped by the Ofgem price cap, which amounts to 53 pence per day in fixed costs for electricity and 30 pence for gas, while electricity rates are 29 pence per kilowatt hour (kWh) and 7 pence/kWh for gas .
However, it is difficult to know for sure what Ofgem’s price cap will do in the future, meaning there is a risk of households being stuck with what turns out to be a high rate.