Should you fix your energy deal now?

A few energy companies have started to offer fixed energy tariffs over the last few weeks, and more may follow. But before jumping at the chance of cheaper rates, here's what you need to know.

British Gas, Eon Next, So Energy, Ovo Energy and Utility Warehouse have all offered fixed-term gas and electricity deals in recent weeks.

These have mainly been for existing customers only - and sometimes only certain small groups of customers. But a few are available to new customers.

As wholesale prices stabilise, more firms may start to offer fixed tariffs to more people, which means you may find yourself weighing up whether or not to fix your energy prices.

While energy companies have to publicly share the prices of deals they put on the open market, they don't have to reveal rates for their customer-only offers. That makes it hard to compare them. 

Below, we've setting out what you should check to make sure you're getting the best deal and know what you're signing up for.

See all our tips on .Can you save money by switching energy tariffs?

If your energy company offers you a fixed tariff, or you spot one from another provider that's open to new customers, the first thing to do is look at the specific unit rates on offer, and compare them to the unit rates you've been told you'll be paying from 1st July. 

For most customers, unless you are still on a fixed tariff, your July rates will be your energy company's variable (also called standard or default) out-of-contract tariff. 

Here's a useful rule of thumb:

If the fixed unit rates are the same as or similar to the ones you'll already be paying from 1 July, the fixed deal will give you price stability over the next 12 months, but won't save you much.

If the fixed unit rates are more than you'll be paying from 1 July, you'll likely end up out of pocket if the cap drops as expected.

If the fixed unit rates are considerably less than you'll be paying from 1 July, it's likely to be a good offer.

The price capped rates from 1 July work out to an average 30.1p per kWh for electricity and 7.5p per kWh for gas if you're paying for a variable tariff by either direct debit or prepayment meter. 

It'll be slightly different for you depending on the region of the country you are in, so check your energy account, or recent communication from your energy provider, for what your specific rates will be.

Note that for most people, the new rates you'll pay from 1 July are an average 17% less than what you were paying from April - June 2023. So your bills should decrease automatically if you're on a variable tariff. 

Varaible rates change every three months. They are expected to fall again in October, and increase slightly in January 2024, according to industry forcasters at Cornwall Insight. But these predictions could change.

Fixing your prices means you'll know what you're paying for the next 12 months, and your rates won't be affected by changes to the price cap. They won't go up in that time period - but they won't go down either. 

That means that fixing is a good option if you value price security. We wouldn't recommend fixing for longer than 12 months, as it's not clear what the future market will look like and whether there will be cheaper deals available by then.

Remember that exactly what you'll be asked to pay over the year depends on how much gas and electricity you use. Regardless of whether your rates are fixed or variable, you only pay for the energy you use, so you'll pay more if you use more and less if you use less.

 and what rates you'll pay.

What to check before agreeing to fixed gas and electricity tariffs

To help you decide whether a fixed deal is right for you, check the following:

Will it save you money?Does it have exit fees? What other conditions are there?Will you have to pay an exit fee to leave your current deal?What do customers think of it? Find out more: different types of .

Should I switch energy supplier?

Right now there are few tariffs available to switch to. Most of us are paying variable, out-of-contract rates. 

These cost pretty much the same regardless of the supplier you're with, so switching company won't save you money.

That's because the energy price cap effectively sets a maximum amount that energy firms can charge for each unit of gas and electricity you use. Until the end of June, the Energy Price Guarantee (EPG) plays the same role.

From 1 July those rates are (on average):

Electricity: Gas:

This is lower than the current rates you're paying under the EPG so you should see your bills drop in July anyway (by around 17%, or £36 per month for a household using a typical medium amount of energy).

But switching provider isn't always just about cost. You may find that choosing a new energy company can get you better customer service, a more user-friendly online account or even access to smart time-of-use tariffs.

Know  when the time comes. 

source https://www.which.co.uk/news/article/should-you-fix-your-energy-deal-now-aScTT3o4cXq3