Households are bracing for an upcoming rise in energy bills set to take effect with the new year. Ofgem’s price cap is scheduled to increase by 0.2% on January 1, potentially resulting in the average customer paying £1,758 annually. However, Ofgem reviews the cap every three months, adding an element of uncertainty for consumers.
Chancellor Rachel Reeves’ recent Budget announcement introduced measures that could lead to an estimated £150 yearly savings for households. Despite this, the majority of the 34 million customers on standard variable tariffs will likely be affected by the price cap hike.
To mitigate the impact, an increasing number of households are opting for fixed energy deals, which now account for around 21 million customers according to Ofgem. While fixed deals do not guarantee a static overall bill, they lock in the unit rate for a specified period, with the total bill dependent on usage.
Switching to a fixed deal could save an average SVT customer around £230 annually. The process is relatively quick, and customers may even find cost-saving deals with their current provider. Additionally, having a smart meter does not hinder the switching process, as it operates similarly to traditional meters.
Research has identified several fixed deals cheaper than Ofgem’s current price cap. For instance, Ecotricity’s EcoFixed – 1 Year Oct 25 v1 offers an average yearly cost of £1,527 with a £75 exit fee. Other competitive options include Outfox Energy’s Fix’d Dual Dec25 12M v1.0 and E.ON Next’s Next Fixed 12m v107, among others.
Energy Secretary Ed Miliband has urged suppliers to pass on the promised £150 average saving to fixed-rate customers, potentially reducing bills further from April onward. Experts recommend considering fixed deals due to falling wholesale prices, with potential savings of up to £228 against the impending price cap.
Suzanne Edwards from Uswitch.com advises households to explore fixed deals, emphasizing the opportunity to secure better value before the January price cap increase. Conducting an energy comparison can help identify cheaper rates and potentially lead to substantial savings.