Should you fix or should you go? Best energy price fixes.
So the Government don’t want the energy companies to freeze prices but the opposition do? While the politicians wrangle over the best political leverage, ordinary householders are more concerned about paying their bills and keeping warm. Good job the weatherman was right about those massive November snowdrifts then. But as we move into the coldest season, is fixing energy prices the right way to go and what are the best deals? If you don’t fix, what might happen to your bills?
Part of the problem with this winter’s impending bills is the fact that most of the ‘Big Six’ energy companies have recently increased their tariffs just in time to reap the maximum profit out of their cold customers- to date Eon is the only one of the six to have not yet announced a rise. However, there are some fixed deals available that can guarantee that prices won’t rise (again) for 12-18 months- or even into 2016. But is fixing the way to go?
If you are currently on a named tariff you may be getting a ‘discount’ from the suppliers standard prices, but this doesn’t mean that prices can’t rise and they generally will rise in line with headline prices. Much like a fixed rate mortgage deal, fixed rate energy prices will not go up for the duration of the fix, although bills may change depending on your usage. However, assuming you use a similar amount of energy as last year, or less if you switch to energy saving lightbulbs (!), you can estimate how much your bill is going to be in advance, with no nasty price rises.
However, fixed prices may be higher than variable prices- according to Which some fixes could be up to 20% higher, as a premium to be sure you won’t face unexpected rises. There will normally be a penalty fee should you wish to switch out of a fix before the end of the fix period, although many suppliers also charge a penalty for switching out within a defined period, often a year, even without fixed prices. Finally, if prices go down, as everyone earnestly hopes*, if you have fixed, you won’t benefit from the drop.
But note that, if you are with one of the raised price Big Six, even 20% higher prices from a competitor might end up being cheaper. Which! investigated the market and came up with a list of the top five fixed rate switches, all from Eon and OVO who have, so far, not raised prices.
Based on an ‘average’ bill, the top five come in as:
Eon Energy Fixed 1 Year (online version) v5 - £1,167.63
Eon Age UK Energy Fixed 1 Year (online version) v5 - £1,167.63
Ovo Energy New Energy Fixed + Ovo Just Reward - £1,175.38
Eon Energy Fixed 1 Year (offline version) v5 - £1,178.13
Eon Age UK Energy Fixed 1 Year (offline version) v5 - £1,178.13
Unfortunately, two of this top five are only available to those over 65, so to add to the list, First Utility are offering longer fixes for those who like long term peace of mind, with offerings fixed until June 2015 or even into January 2016, although the rate increases for the longer fix. Still based on the Government’s negotiations with EDF, it could still be a great deal given anticipated price rises in the next 2 and a bit years.
If you don’t want to fix, and are happy to surf the variable rates, top of most comparison tables is relative unknown Spark Energy's Spark Advance 2, cheapest at £1,116.41 a year.
*but no one believes will actually happen