MILLIONS of energy customers have just days left to take action and avoid being overcharged in the New Year.
On January 1, Ofgem‘s price cap will increase from £1,717 to £1,738 a year, affecting 26 million households on their supplier’s standard variable tariff.
It’s important to note that the price cap is not a limit on the overall amount people will pay for their energy.
Instead, it caps the amount that they pay per kilowatt hour, or unit, for gas and electricity.
So, if you use more energy than a typical household, expect to pay more.
However, there are dozens of fixed energy deals that outperform suppliers’ standard variable tariffs, and it takes just five minutes to start saving ahead of January 1.
Fixed deals work to protect customers from bill hikes if Ofgem were to increase the price cap in the future.
Customers on their supplier’s standard variable tariff see their energy prices change every three months, as these are tied to Ofgem’s price cap.
However, those who lock into a fixed energy deal are charged the same gas and electricity rates throughout the contract’s term.
Fixed deals are available for various periods, typically ranging from 12 to 24 months.
Of course, taking out a fixed deal carries a slight risk of you paying more than those on the standard variable tariff if Ofgem’s energy price cap were to fall within your deal’s term.
Outfox the Market is currently offering the cheapest deal on the open market.
Its The Big January Sale (Jan 25) – Fix’d Dual v1.0 tariff costs a typical household £1,590 a year.
This figure is based on a typical household that uses an average of 11,500kWh of gas and 2,700kWh of electricity every year.
This means it is £148 cheaper than Ofgem’s January price cap.
It comes with a £25 exit fee per fuel or £50 if you lock in with a dual fuel tariff.
E.ON Next offers another cheap 12-month deal with its Next Fixed 12M v40 tariff, costing a typical household £1,599 a year.
This means it is £139 cheaper than Ofgem’s January price cap.
It comes with a £50 exit fee per fuel or £100 if you lock in with a dual fuel tariff.
Other firms may offer offer prices which beat those in the table below.
But, these often cost customers more by forcing them to take out an extra service, like boiler cover, which isn’t always necessary.
So, make sure you always read the small print.
To find the best fixed energy deals, start by visiting price comparison websites, which aggregate various offers from different energy suppliers.
The best sites include Uswitch.com and MoneySavingExpert’s Cheap Energy Club.
Enter your postcode and current energy usage details to receive a list of available deals tailored to your needs – it’ll take you less than five minutes.
You’ll then be able to compare the rates, contract lengths, and any additional features or benefits offered by each deal.
Next, visit the websites of individual energy suppliers to check if they have exclusive deals that are not listed on comparison sites.
Sometimes, suppliers offer special promotions or discounts directly to customers.
Compare these offers with those on the comparison websites to ensure you get the best possible rate.
Finally, consider customer service reviews and the overall reputation of the suppliers.
Once you have identified the best deal, follow the instructions to switch your energy provider.
Customers unwilling to commit to long-term fixed energy deals may want to consider flexible tariffs.
Kara Gammell, personal finance expert at comparison site Money Supermarket Group, says: “These will almost always be at or below the price cap.”
For example, E.ON Next‘s Pledge variable tariff offers a fixed discount of around three per cent on the price cap rates for 12 months.
It will save the average household around £50 a year but comes with a £50 exit fee if you switch before the year ends.
The deal is available to both new and existing customers.
EDF Energy’s Ensure Tracker works in a similar way and offers a £50 discount off the price cap’s standing charges for 12 months.
For a bigger reward but at a higher risk, Octopus Energy offers two variable tariffs which track wholesale gas and electricity costs.
Customers on the Octopus Tracker see their prices change daily, but unit rates have remained consistently lower than the price cap in recent months.
For example, in the last 30 days, people living in Southern England on the Octopus Tracker paid a maximum of 22.5p per kWh for electricity and 5.22p per kWh of gas.
The Agile Octopus tariff works similarly to the Octopus Tracker, but the main difference is that the former’s prices change every half hour.
Remember that those wishing to switch to any of these tracker tariffs must have a smart meter.
There's a number of different ways to get help paying your energy bills if you're struggling to get by.
If you fall into debt, you can always approach your supplier to see if they can put you on a repayment plan before putting you on a prepayment meter.
This involves paying off what you owe in instalments over a set period.
If your supplier offers you a repayment plan you don’t think you can afford, speak to them again to see if you can negotiate a better deal.
Several energy firms have schemes available to customers struggling to cover their bills.
But eligibility criteria vary depending on the supplier and the amount you can get depends on your financial circumstances.
For example, British Gas or Scottish Gas customers struggling to pay their energy bills can get grants worth up to £2,000.
British Gas also offers help via its British Gas Energy Trust and Individuals Family Fund.
You don’t need to be a British Gas customer to apply for the second fund.
EDF, E.ON, Octopus Energy and Scottish Power all offer grants to struggling customers too.
Thousands of vulnerable households are missing out on extra help and protections by not signing up to the Priority Services Register (PSR).
The service helps support vulnerable households, such as those who are elderly or ill.
Some of the perks include being given advance warning of blackouts, free gas safety checks and extra support if you’re struggling.
Get in touch with your energy firm to see if you can apply.
