The countdown is on for the upcoming rise in energy bills that will impact millions of households. Commencing on January 1, Ofgem’s price cap is set to increase by a modest 0.2%. This adjustment, although slight, will result in the average customer paying approximately £1,758 annually. It’s important to note that Ofgem reassesses the price cap every three months, adding an element of unpredictability for consumers.
A significant potential offset to this increase is the projected £150 yearly savings from initiatives outlined in Chancellor Rachel Reeves’ recent Budget announcement. However, for the majority of consumers, who are on standard variable tariffs accounting for around 34 million customer accounts, there are alternatives to absorbing the impending cost hike.
Instead of bracing for the unknown, a growing number of households are opting for fixed energy deals, currently totaling around 21 million according to Ofgem. While fixed deals do not guarantee an unchanged overall bill, they do lock in the unit rate for a specified duration, with the total cost influenced by individual energy usage.
For those contemplating a switch, the benefits are tangible. Customers still on standard variable tariffs could save an average of £230 annually by transitioning to a fixed-rate plan. The process of switching suppliers is streamlined and can be completed swiftly. Additionally, consumers may explore money-saving deals with their current provider before making a decision to switch.
Even those with smart meters need not be deterred, as switching suppliers remains straightforward, irrespective of the meter type. Research conducted by Uswitch.com for the Mirror identified 26 fixed deals priced lower than Ofgem’s current price cap.
Among the top options is Ecotricity’s EcoFixed – 1 Year Oct 25 v1, a 12-month contract requiring a smart meter, priced at an average of £1,527 annually with a £75 per fuel exit fee. Other competitive choices include Outfox Energy’s Fix’d Dual Dec25 12M v1.0 and So Energy’s So Kings One Year Green tariff, offering cost-effective fixed-rate plans with varying contract lengths and exit fees.
Energy Secretary Ed Miliband has urged suppliers to pass on the promised £150 average saving for customers on fixed rates, potentially reducing future bills further. Locking in a fixed deal now can lead to immediate savings, especially during the high energy demand months at the beginning of the year due to cold weather conditions.
Suzanne Edwards, an energy expert at Uswitch.com, emphasized the current value of fixed energy deals amidst falling wholesale prices. By comparing and switching to the most competitive fixed-rate plan, households could save significantly compared to the upcoming price cap increment. Conducting a quick energy comparison is recommended to explore cheaper rate options and potentially secure long-term savings.
