As the new year approaches, many households are bracing for another round of energy bill increases. Ofgem’s price cap is set to rise by 0.2% on January 1, potentially pushing the average annual cost for customers to £1,758. Despite the small increment, the ongoing reviews by Ofgem every three months keep the situation fluid.
Chancellor Rachel Reeves recently announced measures in the Budget that could lead to savings of around £150 per year. However, with approximately 34 million customer accounts on standard variable tariffs, most consumers are likely to feel the impact of the price hike.
To combat the uncertainty, an increasing number of households are opting for fixed energy deals, with around 21 million customers now signed up. While fixed deals do not guarantee a frozen 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 about £230 annually. The process is quick, and customers may not even need to change suppliers if their current provider offers money-saving deals. Moreover, having a smart meter does not hinder the switching process, as confirmed by research showing 26 fixed deals cheaper than Ofgem’s current price cap.
Various fixed deals are available, with options like Ecotricity’s EcoFixed – 1 Year Oct 25 v1 at an average of £1,527 annually. Other competitive deals include Outfox Energy’s Fix’d Dual Dec25 12M v1.0, E.ON Next’s Next Fixed 12m v107, and So Energy’s So Kings One Year Green tariff, all offering potential savings compared to standard rates.
Ed Miliband, the Energy Secretary, has urged suppliers to pass on the promised £150 average savings for fixed-rate customers, potentially reducing costs further from April. Suzanne Edwards, an energy expert at Uswitch.com, emphasized the benefits of fixed deals amid falling wholesale prices, highlighting potential savings of up to £228 against the upcoming price cap. Conducting an energy comparison can help households identify cheaper rates and secure better value deals before the price cap adjustment in January.