Ask our Expert

Energy prices are going up - should I opt for a fixed rate tariff?

Our expert says...

Unfortunately for consumers, energy prices are on their way up again - for the second time this year.

The last round of hikes only ended this March - suppliers increased their prices by an average of 5.6% or £35 for gas and 6.4% or £28 for electricity. This hit almost 28 million customers and added an incredible collective £630 million onto household energy bills.

As a result, the average household energy bill has hit £1,131 a year.

Fixing your rate will give you peace of mind that your bills won’t rise over the length of your contract, regardless of what happens to energy prices in the meantime.

The danger - though a slim one - is that energy prices could fall over the discount period and you’ll pay more on a fixed rate that on a “floating” one. However, all indicators in the energy market say prices are going up, not down.

The other thing to bear in mind about fixed-rate energy deals is that the prices tend to be slightly higher than a variable rate, as peace of mind comes at a cost.

But if the peace of mind a fixed rate deal brings is important, then don’t delay in signing up for one. Fixed, also known as “capped” and discounted rate energy deals are only offered for a limited window and can be withdrawn with no notice period given.

For example, in early June Scottish Power removed its Discounted Energy March 2013 deal from sale with immediate effect.

What’s on offer?

A number of the “big six” energy providers are offering fixed rate deals at the moment.

E.ON’s Fixed Price 5 tariff guarantees your prices until 1 July 2013. With this deal, you not only earn Tesco Clubcard points for money spent on energy, but can also exchange your Clubcard vouchers for online tokens to pay towards your energy bills.

Scottish Power offers its Platinum Fixed energy deal which runs until January 2014 and EDF Energy offers its Fixed Price 2014 which guarantees your prices until 31 March 2014.

With all these deals you’ll get further discounts if you choose “duel fuel” and pay by direct debit. However, if you switch to another supplier during the fixed rate period, you’ll be hit with a termination fee, which will vary depending on how far into the contract you are.

Compare energy prices

The best deal is the one that suits your circumstances and how long you're looking to fix for. Information on fixed energy tariffs currently on the market is available through our energy comparison service; just enter your postcode, details and select compare capped and fixed price tariffs.

When going through the comparison process, it’s a good idea to have your previous energy bills to hand so you have an accurate figure for your consumption - this will also help our energy comparison service to find you the best deals for your needs.

Ask us a question

If you have an energy query please email ourexpert@energychoices.co.uk