As the new year approaches, households are bracing for a slight uptick in energy bills due to Ofgem’s upcoming price cap adjustment. The increase, set at 0.2%, may seem modest, but it will potentially raise the average annual cost for customers to £1,758. Ofgem reviews the price cap every three months, adding an element of uncertainty for consumers.
Chancellor Rachel Reeves recently announced measures in the Budget that could lead to savings of around £150 per year for energy users. Despite this, many customers, particularly the 34 million on standard variable tariffs, are exploring alternatives to mitigate the impact of the price hike.
An increasing number of households are opting for fixed energy deals, now totaling approximately 21 million according to Ofgem. While fixed deals do not guarantee a fixed total bill, they lock in the unit rate for a specific duration, offering stability amidst fluctuating energy costs based on usage.
Switching to a fixed deal could yield significant savings, with the average customer on a standard variable tariff potentially saving about £230 annually. The process of switching suppliers is quick and straightforward, and existing smart meter users can seamlessly transition to a new provider. Research by Uswitch.com reveals numerous fixed deals that are cheaper than Ofgem’s current price cap, with options like Ecotricity’s EcoFixed and Outfox Energy’s Fix’d Dual Dec25 among the cost-effective choices.
Energy Secretary Ed Miliband has urged suppliers to pass on the promised £150 savings to fixed rate customers, further reducing future energy expenses. Acting now allows consumers to benefit from lower prices during peak energy usage periods, such as the colder months. Energy expert Suzanne Edwards recommends considering fixed deals given the current market conditions, emphasizing the potential for significant savings compared to standard tariffs.