Fixed price energy tariffs have gained in popularity as prices rises continue to sky rocket and suppliers offer more and better tariffs that protect you against future price rises
So who has the best fixed price deal on the market right now? And how do fixed price plans work anyway? Find out in the uSwitch guide to fixed rate energy plans.
Fixed plans currently available
As more and more households discover the appeal of freezing their energy bills, suppliers respond by offering fixed rate deals that are more and more competitive. The table below highlights the cheapest fixed price plans currently available.
|ValuePlus Fixed Price October 2015||£990|
|iSave Fixed September 2015||£992|
|Thames Online Fixed Sept 2015||£1,010|
|Better Energy Fixed (online)||£1,011|
|Rate Saver Fixed||£1,019|
Price figures are based on a medium energy user and averaged across all regions. This table does not include advanced payment plans (tariffs that required payment before energy is used)
What is a fixed price energy tariff?
Fixed price gas and electricity tariffs guarantee that the cost of your energy will not go up for a set amount of time. Depending on the tariff, your energy rates could be fixed for anywhere between one and four years.
It is important to note that selecting a fixed price energy plan does not mean you will be paying the same amount for your energy bill each month. Your energy unit rates are frozen, so if you are on a fixed plan and you use more energy one month than another, the bills you will receive will differ accordingly. However, the rate you pay for each unit of energy will be frozen for the duration of the contract.
Since the latter months of 2013 a flurry of short and medium term fixed price plans have taken over the ‘best buy’ energy charts. Some of these deals provide the best of both worlds and offer the protection of fixed prices and competitive market rates. They often appeal to those looking for a medium or short term solution to avoiding energy price rises and offer great value.
On the other hand, fixed price energy can also be more expensive than the cheapest online energy tariffs, particularly if you are considering a long term deal. Fixed price plans also sometimes include cancellation fees, which you will have to pay if you decide to switch tariff before the end of your contract.
If you’re considering switching to a long term deal, i.e. one that fixes your unit rates for at least two years, selecting a fixed price gas and electricity tariff might be a gamble. If energy prices rise you stand to make some big savings, but if they don't, you could end up paying over the odds and faced with steep cancellation fees should you decide to switch.
What should I do when my fixed price plan ends?
When your fixed plan is about to end, the first thing to do is find out which plan your supplier will be moving you to. This may be your supplier's 'Standard' plan, although some suppliers may offer you the chance to fix your prices again.
Standard energy plans are among the most expensive in the market and there are usually cheaper plans available. If you're offered the chance to fix your prices again, you may wish to take it, if you are willing to pay above-average prices in return for security against potential price rises in the future.
Once you know what energy plan you're being moved to:
- compare all available energy plans online and find out how your new plan compares to other deals.
- switch your gas and electricity supplier if you find that you could be saving money with another energy supplier.
For an updated list of fixed price plans coming to an end in the coming weeks, visit our fixed rate plans guide and scroll to the bottom of the page.
Are fixed price plans always a good idea?
Fixed price energy tariffs can be a fantastic option, offering security at the very least, and fantastic savings when you switch at the right time.
However, as mentioned above, fixed energy deals are a gamble, very much like a fixed mortgage. However, rather than hedging your bets against interest rate rises, fixed energy prices allow you to bet on future energy price rises.
If you use our online tool to find an appealing fixed price tariff, chances are that it may cost slightly more than your current variable plan. However, even a slightly more expensive plan will pay for itself if your energy supplier puts up its prices.
It is only in the event of prices remaining unchanged or dropping that you will lose out. The last price cuts came at the beginning of 2012. Since then most energy suppliers have increased their prices.
How else can you control your energy prices
The simplest way to ensure your energy costs don’t go up, with or without a fixed price plan, is to control your usage. Whether prices go up or down, if you can reduce your usage you will always be in control of your energy bills.
The simplest changes can be made around the home. Checking for draughts around windows and doors is simple, and installing draught proofing is cheap and easy to do. It will also save you a lot of money, with an estimated 30% of heat in the home lost through draughts. The most common culprits are around doors and windows, but you should also check floorboards, loft hatches and letterboxes.
When it comes to draughts the most common culprits are around doors and windows, but you should also check floorboards, loft hatches and letterboxes.
Other simple changes include dropping the thermostat by just one degree and checking your timers are accurately set up, particularly after the clocks go forward or backward. We have a handy selection of energy saving guides here.
You could also consider purchasing a smart thermostat. These devices allow you to control your heating remotely and in some cases even adapt your home’s temperature to best suit your needs, without you having to lift a finger! The data a smart thermostat provides should enable you to work out the most energy efficient way to heat your home as well as save money.
Another way to cut your usage is to generate your own energy. Solar panels or wind turbines allow you to generate your own energy which you can then use, reducing your overall energy consumption. Better still, depending on certain criteria you might make back some money by selling the energy to the grid.