IN A FIX
Full list of energy suppliers offering deals up to £150 cheaper than the price cap – is it worth fixing now?
Plus, we've explained the quirky alternatives which could yield even bigger savings
ENERGY firms are now battling it out by offering newbies price cap-beating fixed energy deals.
Customers who lock into tariffs are charged the same gas and electricity rates during the entire term of the contract.
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Fixed deals protect customers from bill hikes if Ofgem were to increase the price cap in the future.
However, you may risk paying more if Ofgem's energy price cap continues to fall in the coming months.
You're also likely to face hefty exit fees worth up to £190 to exit your contract early.
Several major suppliers, including British Gas, Octopus and Ovo Energy, are now offering cheap fixed deals.
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At the moment, those on the standard variable tariff (SVT) have their rates capped by Ofgem at the following levels:
- 6.04p per kilowatt hour (p/kWh) for gas
- 24.50p/kWh for electricity
- A standing charge of 31.43p per day for gas
- A standing charge of 60.10p per day for electricity
For a typical household that uses an average of 11,500kWh of gas and 2,700kWh of electricity every year, these rates will cap bills at roughly £1,690.
As this is only an estimate for a typical household, if you use more energy, you'll pay more.
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But if you're offered a fix that's lower than April's price cap, it's always worth considering.
For example, Ecotricity is currently offering its Green 1 Year Fixed tariff, which costs a typical household £1,540 a year - £150 less than Ofgem's price cap.
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This comes with a £75 exit fee per fuel - so £150 if you lock in with a duel fuel tariff.
Up next is EDF Energy's EDF Essential 1Yr May25 tariff which will set a typical household back £1,580 a year - £110 less than the price cap.
Octopus Energy's 12M Fixed tariff costs the same, but there are no exit fees if you leave early.
It's important to consider that Ofgem's price cap will be reviewed again later this month, as it now changes every three months.
When does the price cap change?
OFGEM reviews the cap on unit rates for those on the default tariff every three months.
This means the energy price cap can move up or down at four different points in the year.
Price cap rates are updated on the following dates:
- January 1
- April 1
- July 1
- October 1
The level for the next energy price cap in July 1, 2024 will be confirmed on May 24.
It means that bills could fall again and current predictions from Cornwall Insight forecast that they'll hit £1,540 a year for the average household from July 1.
With this in mind, Will Owen, energy expert at , said: "Competition is returning to the energy market, and some deals available are the lowest we've seen since late 2021.
"The recently announced Ecotricity One Year Fixed Tariff is currently the cheapest deal on the market, coming in at £1,540 - £20 below the latest predicted price cap of £1,560 from July.
"If the price cap predictions are accurate, consumers may benefit from taking this deal or other similarly priced tariffs.
"They may need to act fast though to lock in while still available."
But Kara Gammell, personal finance expert at MoneySuperMarket, says that if you're also looked for bill stability most deals are still worth considering.
She said: "If you’re looking for the peace of mind of knowing that you won’t be at the risk of future price increases, then a fixed tariff could provide that reassurance.
"Remember to factor in any fees that would apply if you did choose to leave the tariff before the end of the fixed term contract.
"For some, price is one consideration alongside other factors like the sustainability of the energy supply and households who can have a feed-in tariff, or who charge electric vehicles at home.
"But for those households, waiting for more choice could outweigh short term cost benefits of switching now."
How do I calculate my energy bill?
BELOW we reveal how you can calculate your own energy bill.
To calculate how much you pay for your energy bill, you must find out your unit rate for gas and electricity and the standing charge for each fuel type.
The unit rate will usually be shown on your bill in p/kWh.The standing charge is a daily charge that is paid 365 days of the year - irrespective of whether or not you use any gas or electricity.
You will then need to note down your own annual energy usage from a previous bill.
Once you have these details, you can work out your gas and electricity costs separately.
Multiply your usage in kWh by the unit rate cost in p/kWh for the corresponding fuel type - this will give you your usage costs.
You'll then need to multiply each standing charge by 365 and add this figure to the totals for your usage - this will then give you your annual costs.
Divide this figure by 12, and you'll be able to determine how much you should expect to pay each month from April 1.
What are the alternatives?
Customers unwilling to commit to long-term fixed energy deals may want to consider flexible tariffs.
Kara Gammell, personal finance expert at comparison site Money Supermarket Group, says: "These will almost always be at or below the price cap."
For example, E.ON Next's Pledge variable tariff offers a fixed discount of around three per cent on the price cap rates for 12 months.
It will save the average household around £50 a year but comes with a £50 exit fee if you switch before the year ends.
The deal is available to both new and existing customers.
For a bigger reward but at a higher risk, Octopus Energy offers two variable tariffs which track wholesale gas and electricity costs.
Customers on the Octopus Tracker see their prices change daily, but unit rates have remained consistently lower than the price cap in recent months.
For example, in the last 30 days, people living in Southern England on the Octopus Tracker paid a maximum of 20.3p per kWh for electricity and 4.81p per kWh of gas, which is 4.2p and 1.23p cheaper than the price cap per fuel.
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The Agile Octopus tariff works similarly to the Octopus Tracker, the main difference is the former’s prices change every half hour.
Remember that those wishing to switch to any of these tracker tariffs must have a smart meter.
What energy bill help is available?
THERE'S a number of different ways to get help paying your energy bills if you're struggling to get by.
If you fall into debt, you can always approach your supplier to see if they can put you on a repayment plan before putting you on a prepayment meter.
This involves paying off what you owe in instalments over a set period.
If your supplier offers you a repayment plan you don't think you can afford, speak to them again to see if you can negotiate a better deal.
Several energy firms have grant schemes available to customers struggling to cover their bills.
But eligibility criteria varies depending on the supplier and the amount you can get depends on your financial circumstances.
For example, British Gas or Scottish Gas customers struggling to pay their energy bills can get grants worth up to £1,500.
British Gas also offers help via its British Gas Energy Trust and Individuals Family Fund.
You don't need to be a British Gas customer to apply for the second fund.
EDF, E.ON, Octopus Energy and Scottish Power all offer grants to struggling customers too.
Thousands of vulnerable households are missing out on extra help and protections by not signing up to the Priority Services Register (PSR).
The service helps support vulnerable households, such as those who are elderly or ill, and some of the perks include being given advance warning of blackouts, free gas safety checks and extra support if you're struggling.
Get in touch with your energy firm to see if you can apply.
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