Energy customers could save almost £180 by shopping around for fixed deals, consumer groups have said.
This would more than cancel out the £111 increase to the average bill announced today by Ofgem, which will come into force from 1 April for three months.
Fixed deals lock customers in at one price for a set period of time, such as 12 months, which can be a money-saver if the price cap rises, but customers can miss out if it is substantially reduced
Despite analysts predicting a £93 drop in the cost of the average energy bill in July, Martin Lewis, Which? and Uswitch have urged consumers to consider fixes.
“The cheapest year-long standalone fixes right now are about 4% less than the current cap, never mind once it rises in April,” said Mr Lewis.
“So if you get a good fix now, you lock in at a cheaper rate for a year, get price certainty, save instantly and save relatively more once we get to April.”
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The cap is currently set at £1,738, but it will rise to £1,849 in April.
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The cheapest fix on the market is currently £179 below the April cap, offered by Outfox the Market, according to Uswitch.
The cheapest fixed deal from a large supplier, British Gas, is set at around £172 per year against the April rates.
“If you are still riding the rising rates, now is the time to find a better deal,” said Uswitch director of regulation Richard Neudegg.
But wait for a couple of hours before switching, Mr Lewis said – he’s heard more tariffs are being launched.
Analysts at Cornwall Insight predict the average energy bill will fall by £93 from £1,849 to £1,756 in July, which is still £18 above the current price cap.
The UK’s reliance on imported gas, high levels of volatility in the market and the ongoing consultations from Ofgem on the non-wholesale elements of the cap mean it is “extremely likely” forecasts will change multiple times before the cap is set, the consultancy agency said.
“Unfortunately, there’s no ‘one size fits all’ approach when it comes to fixing an energy deal – the best option for your home will depend on your individual circumstances,” said Emily Seymour, energy editor at Which?
“As a rule of thumb, we’d recommend looking for deals cheaper than the price cap, not longer than 12 months and without significant exit fees.”
Read more:
Energy bills for typical household to rise from April
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What is the energy price cap?
The cap sets a maximum price that energy companies can charge people in England, Scotland and Wales for each unit of energy they use.
It does not represent a maximum total bill. The headline annual figure represents an average bill based on these unit prices and the energy consumption of a typical household, plus fixed standing charges (which all households pay to stay connected to the grid).
