Rising energy bills: should you go for a fixed tariff?
According to Mark Todd of comparison service energyhelpline.com, now is the time of year providers historically start increasing their prices as they stock up to meet demand over the winter months.
And he believes this year will be no exception: “I fear 5%-10% cost increases are on the way.”
One of the big decisions for households is whether to opt for a fixed term or variable plan. A fixed price tariff means that your unit rates stay at one price for the duration of the plan, which can range from one to three years.
The main benefit of fixing your tariff is that it will protect you from any future price rises. Of course, you will miss out if energy prices drop.
However, Todd says all evidence points towards energy prices continuing on an upward spiral.
“There has been a three year bounce and there are no indications costs are coming down. The big hope is fracking but that seems to be making slow progress in the UK,” he said.
Gas imports are also at record highs, according to government figures released last week, which Todd says adds to pricing pressure: “It costs more when you are importing it.”
In light of expected price hikes, a number of providers have launched fixed-tariff deals lately in an attempt to attract customers.
This week ScottishPower launched a new product that will fix prices until 31st December 2016. The Help Beat Cancer Fixed Price Energy January 2017 deal is currently the longest fixed price product in the market, and has an annual average bill of £1,350. The provider will donate £10 to Cancer Research UK on taking out the deal, with a further £10 a year donation until it ends.
However, consumers need to decide what matters most to them: price or length. The cheapest on the market is M&S Energy Fix & Save, which will cost on average £1,139 with a £50 cancellation fee but is only fixed until September 2014.
|Supplier||Plan Name||Date prices are fixed to||Average Bill Size (£)||Additional Info|
|Cheapest on the market||M&S Energy||Fix & Save||30.09.2014||£1,139||£50 Cancellation fee|
|Second cheapest fix||npower||Online Price Fix October 2014||31.10.2014||£1,181||No cancellation fee|
|Cheapest variable||First:Utility||iSave v16||N/A||£1,155||N/A|
|Second cheapest variable||npower||Energy Online Oct 2014||N/A||£1,156||N/A|
|Second longest fix||EDF Energy||Blue+Price Freeeeze November 2016||30.11.2016||£1,350||No cancellation fee|
|Longest fix||ScottishPower||Help Beat Cancer Fixed Price Energy Online January 2017||31.12.2016||£1,350||£25 Per Fuel Cancellation fee if moving to another supplier|