Pensioners who learned this week that their winter fuel payments were being stopped – and anyone else who wants to cut their gas and electricity bills this winter – should consider one of the fixed-rate tariffs launched in recent days.
Until now, the handful of fixed-rate energy deals offered by UK energy suppliers just haven’t been cheap enough to tempt us to recommend them.
However, that has all changed because a number of suppliers have come up with tariffs that are well worth considering.
The deals offer a guaranteed unit price and standing charge that will not move up or down during the next 12 months, even if the regulator’s cap on costs increases as expected. Your actual bill will depend on how much energy you use.
The pick of the bunch is Outfox the Market’s Fix’d Dual Jul24 v3.0, which is fixed at £1,558 a year for an average-using household, and at almost exactly the current price cap. The company was in sixth place in the recent Which? energy company customer service rankings. To get the deal, users need to sign up with the company directly rather than via a switching site.
British Gas, EDF, Octopus Energy and Co-op Energy are offering one-year fixed-rate deals that are within a couple of pounds of the Outfox deal.
If prices head in the direction analysts expect, any of these tariffs should offer about a 10% saving when prices go back up in October and stay there for the winter months, when our consumption is at its highest.
Cornwall Insight, which has become the go-to forecaster, is predicting that the energy cap will be increased to £1,723 in October and stay at that rate until the end of March.
There are a couple of things to note. The Outfox and EDF tariffs have £50 exit fees (£25 for each of gas and electricity) payable if you leave before the year is up. The British Gas deal has £100 exit fees, while Octopus does not have any, making this the one to opt for if you think your circumstances may change – for example, if you plan to buy an electric car in the next year. Those signing up to the EDF deal have to have a smart meter, or agree to have one installed.
Most people switching to one of these deals should save £175-£300 depending on their consumption. Buyers also get the certainty of knowing their bills won’t increase in the next year – useful, given the geopolitical state of the world right now.
Elise Melville, an energy expert at the comparison website Uswitch.com, says consumers wanting to fix should act now as these deals could be pulled at any moment.
“Millions of households face the pain of higher energy bills this winter if forecasts for the October price cap are correct, which is a double blow for pensioners who lose their winter fuel payments,” she says.
“The long-term outlook for energy bills remains uncertain, and prices are likely to remain at a similar, higher level in the first quarter of next year. We’ve been seeing providers repricing fixed deals over the past few months, and the window of opportunity for getting a good tariff could close soon.”
This week, the chancellor, Rachel Reeves, scrapped winter fuel payments in England and Wales for all but the poorest of pensioners. The payments, worth between £100 and £300 a year, were being paid to anyone of state pension age.