Fixed energy deals trap warning as bill payers may get better deal if they wait

World News

Britons have been warned now is not the time to secure a fixed rate energy deal as prices continue to fall.

Greg Marsh, CEO of household money-saving tool, told “For most people a fixed energy deal is not worth it right now. Wholesale energy prices continue to be volatile and may continue to fall.

“Unless you really prioritise certainty, fixing too soon could leave you stuck paying more than you need to.”

Major suppliers including Octopus Energy, EON Next, EDF, Sainsburys and British Gas are all offering fixed deals to existing customers under the Ofgem price cap.

Under the current price cap, a typical household pays £2,074 a year on energy bills. Predictions from Cornwall Insight suggest this will fall to £1,926 a year from October.

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Mr Marsh pointed to the expected rates drop in October and said those fixing now could “miss out” on future price reductions.

He said: “There are smart ways to save on your energy bills without fixing using Nous – most households can save the better part of £150 without moving to a fixed tariff deal.”

He said people get certainty by fixing as they can get a clear picture of how much they will pay for their usage and they are protected from prices going up.

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But signing up for a fixed deal has other disadvantages. He commented: “Fixed tariffs have high exit fees, usually £150 for a dual fuel customer, so if prices do fall again you could be left paying more than you need to.”

Ofgem recently urged consumers to be careful when looking at fixed rate deals. The regulator said: “Think before you fix.

“Fixed-rate energy tariffs have seen a return to the market but check if they are right for you.

“Prices are still unpredictable and signing up for a fixed rate now might mean you miss out if prices fall in the future.”

The energy price cap previously fell from £3,280 a year to the current £2,074 a year in July.

Consumers were previously protected from paying the £3,280 amount by the Government’s energy price guarantee, which capped the unit price of energy meaning consumers paid on average £2,500 for their energy.

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