Is it time to fix your energy deal?
What's happening with the price cap?
The energy price cap is set at £1,758 for the period from 1 January to 31 March 2026, but it will come down by about 7% for the average customer from 1 April. This is a fairly large drop which is locked in and won't change until 1 July.
What's happening with wholesale prices?
However, conflict in the Middle East has seen wholesale prices spike, which has led to fewer deals available that offer savings against the price cap. We don't know how long the conflict and the spike will last, but it won't filter through into energy prices until the new price cap in July.
So should I fix my deal?
It depends how much you value locking in energy prices and knowing what you'll pay for the duration of a contract.
If you’re on a fix that’s coming to an end soon, there are still some deals available that offer savings against the April price cap of £1,641 that you should consider switching to. Alternatively, you can keep an eye on the market to see where prices are by the time you’re eligible to switch, but waiting could mean there's even less choice available.
If you’re on a standard variable tariff, you should also consider fixing to one of the deals that offer savings.
If you decide to do nothing, the April price cap will offer protection from these price spikes at least until it changes in July. We don't know whether this spike is short- or long-term - the longer it lasts, the more likely it will cause the price cap to rise.
What should I consider when switching energy?
Do consider exit fees. You may change your mind about your fixed deal and want to switch again. But if this happens after your cooling-off period, you might have to pay an exit fee. Not all tariffs have exit fees but most do, so make sure to check the terms of your current tariff.
Do consider the length of the deal. Most tariffs last for 12 or 24 months. During this time the price cap could rise or fall based on market conditions, so consider how long you would like to stay locked in for.
Do stay informed. Keep a close eye on the market and run regular comparisons to see what deals are on offer. If you sign up for alerts, you can stay close to what’s happening in the energy market and find out when a good deal comes along.
Don’t get a deal you can't afford. Make sure you can afford the deal you choose and don’t rush into one that you'll struggle to pay for.
Don’t just look at the direct debit amount. The price you pay through Direct Debit each month is usually based on your estimated energy usage over a year. This may not be the actual cost. Make sure you look at the unit rate and standing charge to work out how much you will be charged for your energy usage. You can also see how it differs from what you’re paying now. Find out more about fixing your energy deal here.
Customers will have to consider their finances and how important price certainty is to them before signing up to a fixed deal. The right decision for someone else might not be the right decision for you, so make sure you consider all your options carefully.
You can compare energy prices and deals that are currently available by clicking below.
Run an energy comparison
Click here to compare energy prices and get started on your energy switch.