The energy market in Great Britain faces significant changes as Ofgem announces a 6.4% increase in the energy price cap. This adjustment will see the average energy bill rise by £111 from April, bringing the annual cost for a typical household to £1,849. With around 22 million customers on standard variable tariffs across England, Scotland, and Wales potentially affected, industry experts are urging consumers to consider switching to fixed-energy deals.
Currently, 11 million people have opted for fixed-energy deals. Since Ofgem's last announcement in November, an additional four million customers have switched to these arrangements. Martin Lewis, a prominent financial expert, strongly advises consumers to secure a cheaper fixed deal now, warning that staying on a supplier’s default tariff is akin to "ripping yourself off."
"Nobody should be on the price cap." – Martin Lewis
Richard Neudegg from Uswitch echoes similar sentiments, emphasizing that now is an opportune moment for those on standard variable tariffs to make a move. Fixed deals offer protection against future price hikes for periods of 12 months or more, providing both cost savings and financial certainty.
"As a rule of thumb we’d recommend looking for deals cheaper than the price cap, not longer than 12 months, and without significant exit fees." – Uswitch
Several energy providers are offering competitive fixed tariffs, often cheaper than the current price cap and certainly more economical compared to the upcoming April rates. Companies like E.ON Next, Ovo Energy, EDF, and So Energy have introduced fixed tariffs with potential savings. Uswitch highlights Ecotricity’s competitive offerings and Outfox the Market's attractive deals.
The British Gas deal Fixed Tariff v33 exemplifies the benefits of switching. With an estimated yearly cost of £1,668 for an average dual-fuel household, it offers a £181 saving against the new April cap figure. However, consumers should be aware that some fixed deals may include exit fees ranging from £25 to £75 per fuel.
"Ripping yourself off" if you stay on your supplier’s default tariff – Martin Lewis
"Help to bring costs down and provide certainty over coming payments" – Ofgem