As we approach the upcoming rise in energy bills, millions of households are bracing for the impact. On January 1, Ofgem’s price cap is set to increase by 0.2%, which could see the average customer paying around £1,758 annually. Ofgem reviews the cap every three months, adding uncertainty to next year’s energy costs.
Chancellor Rachel Reeves announced measures in the recent Budget that could potentially save customers around £150 per year. Despite this, many customers on standard variable tariffs, which make up about 34 million accounts, may still face higher bills. However, instead of passively accepting the increase, an increasing number of households are opting for fixed energy deals.
Currently, around 21 million households have chosen fixed deals, where the unit rate remains stable for a specific period. Switching to a fixed deal could save an average SVT customer approximately £230 annually. The process of switching suppliers is straightforward and quick, with savings potentially outweighing any exit fees.
Customers with smart meters can also switch suppliers seamlessly. Among the numerous fixed deals available, some are cheaper than Ofgem’s current price cap. For instance, Ecotricity’s EcoFixed – 1 Year Oct 25 v1 offers an average annual cost of £1,527 with a £75 exit fee, making it an attractive option for smart meter users.
Other competitive fixed deals include Outfox Energy’s Fix’d Dual Dec25 12M v1.0, So Energy’s So Kings One Year Green tariff, and E.ON Next’s Next Fixed 12m v107, each offering varying prices and contract lengths. By exploring these fixed deals, customers could potentially reduce their energy costs significantly.
Ed Miliband, the Energy Secretary, has encouraged suppliers to pass on the promised savings to fixed-rate customers, further reducing energy expenses. Locking in a fixed rate now can lead to immediate savings and shield customers from future price hikes. Suzanne Edwards, an energy expert at Uswitch.com, advises households to consider fixed deals to benefit from lower prices and potential savings compared to standard tariffs.