As energy prices continue to climb, many households are questioning whether it’s time to move to a fixed-rate energy deal. With recent increases pushing up average bills by over £150 a year, finding ways to manage costs has become a priority for many.
Energy Bills Continue to Rise
April saw a 6.4% hike in the energy price cap, following a 1.2% rise in January and a significant 10% jump last October. These increases apply to the standard variable tariffs used by millions of households and have driven the average annual energy bill to around £1,849. For a typical household, that’s an extra £9 per month compared to the previous quarter.
The price cap is reviewed every three months by Ofgem, the UK’s energy regulator, and sets the maximum rate that energy suppliers can charge per unit of gas and electricity. It also includes a limit on the standing charge — the flat daily fee consumers pay regardless of usage. However, it’s important to understand that the cap doesn’t limit your total bill. The more energy you use, the more you’ll pay.
How a Fixed Energy Deal Works
A fixed-rate energy deal guarantees a set price per unit of gas or electricity for the duration of your contract, typically lasting between 12 and 24 months. That means your cost per unit won’t change, even if market prices go up — although your total bill can still increase if your consumption rises.
This level of certainty can be appealing, particularly during periods of volatile pricing. If your energy supplier increases prices during your fixed deal period, you’ll be protected from those hikes until your contract ends.
Fixed deals are available for dual fuel — where both gas and electricity come from the same provider — or you can opt to fix each one separately with different companies.
Is It the Right Time to Switch?
Some of the current fixed-rate deals on offer are actually cheaper than the standard variable tariffs that are capped by Ofgem. In fact, a few fixed options are priced as much as 5% below the capped rate.
Those who chose to fix their rates before the latest wave of increases are now paying significantly less than those on standard tariffs. With the price cap changing quarterly, fixed deals offer more stability, though they might not always be cheaper in the long run — especially if market prices fall.
Before jumping into a new contract, it’s wise to contact your current supplier. Many providers now offer exclusive deals to loyal customers, and you could benefit from preferential rates without needing to switch companies.
Weighing Your Options
Switching to a fixed deal could provide peace of mind and potential savings, especially if energy prices continue to rise. However, the best choice depends on your circumstances, how much energy you use, and how much value you place on price certainty.
For households looking to take control of their energy bills and reduce the risk of future increases, now might be a sensible time to consider a fixed-rate tariff — particularly with some competitive deals available below the price cap. Just be sure to compare offers carefully and speak to your current provider before making a decision.