Starting 31 March, those enjoying fixed price energy rates on ‘super cheap’ tariffs from suppliers including npower and EDF Energy could soon see their bills sky rocket by as much as £214.
There are three big-value fixed price deals set to expire from 31 March: EDF Energy’s Fix to March 2013 and npower’s Go Fix 10 and Go Fix 11. Customers on these plans have had their rates fixed since December 2011, protecting them from price hikes which have seen average household bills increase to £1,353 a year.
These plans cost £1,064 a year on average, £191 — or 18% — less than if they moved to their supplier’s standard direct debit tariff today.
The cheapest of the three deals set to end soon is npower’s Go Fix 11, which expires 21 May. The average customer on this plan is paying £1,033 a year. If no action is taken, these customers will be rolled on to the Go Save S plan, which will cost them £214 more a year.
However, some fixed price customers will actually see their yearly bill go down; those on British Gas’ Fixed Price March 2013 have been paying an average of £1,307 a year since July 2011, which is £34 more than the supplier’s current standard direct debit price plan. This means that they have been locked-in at a higher price than they needed to have been paying.
uSwitch energy expert, Tom Lyon, says of the looming expiries: “Many of these households face an increase of over £200, which reflects how much energy prices have rocketed in the intervening years, but could still come as a bit of a shock. With energy prices so high, and so much uncertainty over future prices, they now have an important decision to make and we would urge them to take the time to shop around.”
Fixed price for protection
“Fixed price energy plans are designed to protect consumers from price hikes. The fact that so many people will be seeing their energy bills go up as their current fixed price deal comes to an end means that these plans have been doing their job,” added Lyon.
So, is fixed price the way to go? With recent news of energy price hikes, as well as predictions for more energy bill increases to come this year, the simple answer for many households is yes — however, consumers should do their homework to find the best fixed price deals on the market and then compare them with the best variable price deals to make sure they are happy paying a little more for security against potential prices hikes.
Current ‘best’ fixed price plans
The best fixed price plans depend on the customer’s requirements:
Currently the cheapest fixed price tariff available is Ovo’s New Energy Fixed. The plan locks prices for 12 months from its going-live date, and costs £1,172 a year.
Those looking for a more secure price freeze can turn to EDF Energy’s Blue + Price Promise June 2014. It costs £1,182 per year and does not come with a cancellation fee. This is reassuring news for those worried about prices falling between now and next summer.
npower recently launched the longest fixed price tariff on the market, Price Fix December 2015. At £1,305 a year, this plan freezes rates for three years. Right now, the deal is cheaper than any of the standard cash and cheque plans from the big six suppliers, which means consumers on older standard tariffs could save up to £50 by switching to npower’s fixed price plan.
Save today; pay more tomorrow
Lyon reminds consumers they have two options: take a cheaper, variable plan now to save today. But this plan will not protect them from future price hikes.
“[Fixed price plans] carry a small premium, but give you the security and peace of mind that many households value, especially as indications are that prices will continue to go up.”