Fixed price energy plans rise in popularity as Brits fear further price hikes
According to uSwitch.com, warnings over future price hikes and the recent battle among Britain’s big six energy suppliers to offer consumers the best fixed price deal, are reigniting consumers’ interest in fixing their energy prices for the future.
The number of households making use of these price fix guarantees is on the up, with three in ten switchers now opting for one, compared to under one in ten last month.
Tom Lyon, energy expert at uSwitch.com, said: “Historically, fixed price plans used to carry a premium. However, we’re now seeing tariffs that are fixed, but also qualify as a ‘best buy’.
“This is great for consumers as it means they get to enjoy a competitive price today, along with price protection for the future. With so much uncertainty about future prices and with bills already having hit an all-time high, this is doubly important and gives consumers even more reassurance that they are making the right move.
“Some also don’t carry any early exit fees, which removes any risk from fixing as, if prices do fall in the future, you can simply ditch your tariff and move to a better deal without incurring any penalties. This puts consumers firmly in the driving seat.
“It’s also important to stress that the ‘fixed’ element of a fixed price tariff is in the amount charged per unit of energy used. So if you are on a fixed price plan, but make your home more energy efficient, you will still save money.”
Similar to a fixed-rate mortgage, fixed price energy plans allow consumers to safeguard against further energy price rises for a set period of time. It means that their price per unit of energy is fixed during this period – for anything up to just over 3 years.
uSwitch.com said that while traditionally fixed price plans have carried a premium on the price, this has now changed.
How much it costs the average household depending on their tariff and billing method:
|Type of plan||Tariff name||Cost||Fixed until|
|Average standard (cash and cheque)||n/a||£1,353||n/a|
|Average standard (direct debit)||n/a||£1,265||n/a|
|Cheapest variable||SSE Discount ENergy Bonus October 2014 (with paperless billing)||£1,146||n/a|
|Cheapest fixed||Flow Energy’s Thames Fixed Online||£1,135||31/08/2014|
|Cheapest fixed no cancellation fees||EDF Energy’s Blue+ Price Promise February 2015||£1,192||28/02/2015|
|Longest-term fix, plus no cancellation fees||npower’s Price Fix Sepetmebr 2016||£1,318||30/09/2016|