As the new year approaches, households are bracing for an upcoming rise in energy bills. Ofgem’s price cap is set to increase by 0.2% on January 1, potentially leading the average customer to spend £1,758 annually. However, there is hope for savings with Chancellor Rachel Reeves announcing measures in the recent Budget that could result in around £150 in yearly savings.
To combat the price hike, many households are turning to fixed energy deals, with approximately 21 million customers opting for this option according to Ofgem. While fixed deals do not guarantee a stagnant overall bill, they lock in the unit rate for a specific period, with the total bill dependent on usage.
Switching to a fixed deal could save an average SVT customer around £230 annually. The process is quick and can be completed in minutes, although the transfer may take a bit longer. Those with smart meters can switch suppliers seamlessly, with numerous fixed deals available that are cheaper than Ofgem’s current price cap.
Various competitive fixed deals are on offer, such as Ecotricity’s EcoFixed at £1,527 yearly with a £75 exit fee, Outfox Energy’s Fix’d Dual Dec25 at £1,541 annually with a £75 exit fee, and E.ON Next’s Next Fixed 12m at an average of £1,578 per annum with a £50 exit fee per fuel, among others.
Ed Miliband has urged suppliers to pass on the promised £150 average saving for fixed-rate customers, indicating potential further savings starting in April. With falling wholesale prices, now is an opportune time for households to consider fixed deals before the price cap adjustment in January. Suzanne Edwards from Uswitch.com recommends comparing energy deals to potentially save around £228 compared to the upcoming cap and avoid overpaying on standard tariffs.
