Should I go fix my gas and electric costs? - Utilities - News - Moneyfacts

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Should I go fix my gas and electric costs?

Should I go fix my gas and electric costs?

Category: Utilities

Updated: 01/05/2014
First Published: 31/08/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Fixing your energy costs is a pretty tempting thing to do at the moment.

With two big price rises in less than a year, the amount we pay for our domestic fuel has jumped considerably. And, in the long term, the expectation is for energy prices to rise further still – it's predicted we'll be paying an extra 50% at least by 2020.

But with Colonel Gaddafi on the run, the Arab spring trying to turn into glorious summer and other factors – such as probes into the big profits of the big electricity and gas suppliers – a price drop in the near term isn't entirely out of the question either.

Fixed energy tariffs explained

Fixing your energy costs doesn't mean that you are committing to buy a set amount of energy. It instead means that any energy you use in a set period will be at a fixed cost.

Because you benefit from a fixed cost for your energy, the supplier will charge you a penalty fee if you decide to switch gas and electric provider before the end of the fixed period. So you have to be sure that you can commit to the tariff before signing up.

If you get a fixed tariff with a gas and/or electricity supplier you're either saying:

  • "I think prices might go up so I hope to save money with fixed energy costs."

or

  • "I'm not sure what energy prices will do, but I can't afford for them to go up right now – I need to know how much I'll be paying."

The major downside with fixed energy costs is if gas/electric prices go down. In this case, other customers will be getting cheaper energy than you are – and if you want to come out of your deal, you'll face a penalty.

So, in summary, you need to be reasonably convinced that energy prices will go up during the term of the fixed period.

The 6 best fixed energy tariffs

Supplier Tariff Cost* Approx. Length of Fix Additional Information
Scottish Power Online Fixed Saver Dec 2012 £990 (includes £30 Cashback) 1.2 years £15 Cashback per fuel taken
Prices fixed until 30.11.12
Cancellation penalty: £30.64 for electricity and £20.42 for gas
EDF Fixed S@ver V2 £1,009 1.2 years Prices fixed until 30.09.12
Cancellation penalty: £50
Ovo New Energy Fixed £1,050 1 year 15% Green Electricity

Prices fixed for 12 months

Cancellation penalty: £30 fee per fuel
EDF Fix for 2012 £1,051 1.3 years Prices fixed until 31.12.12
Cancellation penalty: £50
EDF Fixed Price 2014 £1,084 2.6 years Prices fixed unitl 31.03.14
Cancellation penalty: £35 per fuel if you leave before 31.03.12. £15 per fuel if you leave before 31.03.13.
Ovo Green Energy Fixed £1,113 1 years 100% Green Electricity
Prices fixed for 12 months
Cancellation penalty: £30 per fuel

Source: EnergyHelpline 31.08.11

*Cost for a yearly bill based on average usage figures from Ofgem across the UK.

Compare the best energy prices in our Utilities section

Beware of cheap energy prices

Fixed energy costs will stay the same throughout the fixed period. Because of this they are usually priced a little higher than the very cheapest energy tariffs on the market.

It can be tempting to change your mind and go for the best energy price, rather than for a fixed. Remember that the cheapest energy tariffs are variable – so they will go up if a supplier raises its gas or electricity prices. While you can probably save a bundle with an energy switch to one of these attractive offers, you may be stung later if costs go up.

That said, Scottish Power's Online Fixed Saver Dec 2012 is one of the cheapest tariffs in the whole market – including low cost online variable prices, although your prices are only fixed for one year. Some tariffs are fixed for over 3 years!

The 6 cheapest energy tariffs (fixed and variable)

Supplier Tariff Cost* Additional Information
E.ON Save Online 9 £982 Variable Tariff
nPower Sign Online23 £983 Variable Tariff
Scottish Power Online Fixed Saver Dec 2012 £990 (Includes £30 Cashback) Prices fixed until 30.11.12

£15 cashback per fuel taken

Cancellation penalty: £30.64 for electricty and £20.42 for gas
EDF Fixed S@ver £1,009 Prices fixed until 30.09.12
Cancellation penalty: £50
nPower Bill Saver £1,021 Variable Tariff
Co-op Energy Pioneer £1,023 Variable Tariff
Price commitment until September 2011

Source: EnergyHelpline 31.08.11

*Cost for a yearly bill based on average usage figures from Ofgem across the UK.

Compare the best energy prices in our Utilities section

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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