Writing for the Telegraph, Richard Dyson suggests that if prices continue to rise at the current rate over the next few years, fixed tariffs could look an increasingly attractive proposition.
These claims come in the wake of various industry experts alluding to imminent energy price rises.
Prices to continue to increase
According to Ofgem, the average household in the UK has seen bill hikes of £300 in the last few years. In a similar vein, npower has warned that energy bills for Brits will go up by £240 in the next seven years.
The German owned energy provider, which supplies energy to 13% of UK households, also stated that it would not rule out implementing a price hike before Christmas 2013.
Are fixed rate energy plans the answer?
One option for consumers looking to avoid price hikes is to sign up to a fixed rate energy deal.
Scottish Power launched its Fixed Price Energy January 2017 plan last week. Under the Scottish Power deal, homeowners commit to paying an annual charge of £1,350 based on the average pattern of household usage. If the energy market continues to evolve as forecast, the plan would enable consumers to make a saving.
However, a number of factors and risks need to be considered before selecting an energy contract.
Fixing rates carries certain risks
The primary issue concerning fixed price contracts is the premium which consumers pay to ensure their energy prices are fixed.
For example, Dyson considers the average household on M&S Energy’s Fix & Save tariff, the current cheapest one-year deal on the market, which will pay £1,139. If energy prices rise by 10% per year, this figure would reach £1,500 by the third year.
Their total payment over three years would then be £3,891, £159 lower than the Scottish Power three-year total of £4,050.
However, should energy prices rise by more over that period; it is possible that those on the M&S Energy deal would pay more.
As winter approaches and many fixed energy plans come to an end, it is up to consumers to work out what tariffs are best suited to their needs.