Major energy suppliers such as British Gas have quietly introduced fixed tariffs – how do they compare?

Britain’s major energy suppliers, including British Gas, have quietly introduced fixed tariffs for their customers following a fall in Ofgem’s price cap.

Most households switched from a fixed to a variable tariff during the energy crisis as wholesale prices soared.

While variable tariffs are regulated by Ofgem’s price cap, which has fallen from £2,074 a year to £1,834 this month, many households will still crave the stability of a fixed tariff.

Fortunately, some suppliers have begun to quietly introduce offers as the market begins to calm down and wholesale prices fall.

Energy suppliers have started offering fixed tariffs to new and existing customers

These deals will probably not be as cheap as they were before the crisis, but they are a step in the right direction.

We look at the details of the best landline offers for electricity and gas, compare them and check whether it’s worth taking out a deal.

How do they compare?

Ofgem’s price cap sets the amount customers pay for a typical household that uses gas and electricity and pays by direct debit.

This means households will have to pay £1,834 for what is considered “average” energy use for the year after Ofgem lowers the cap.

British gas There are currently eight fixed tariffs on offer, four of which are available to new and existing customers.

The Fixed Oct24 v2 and The Fixed One v25 tariffs are valid for one year, with customers paying an average of £1,953 and an exit fee of £75/fuel.

The two-year fix is ​​slightly higher at £1,975, with an exit charge of £100/fuel, and both one- and two-year fixes are available for new customers.

EDF offers a slightly better deal, with an average customer paying £1,914 for a one-year and three-year repair. This is available for new and existing customers.

It states that the three-year fix “provides security and protects against increasing costs during this period”.

Shell energy is offering fixed offers for new and existing customers until January 2025 for £1,944.

While higher than some other deals, monthly bills come in at £162, while the EDF one-year fix will see customers paying £159 a month.

Last month, Octopus energy announced that it would take over Shell Energy’s 2 million customers.

Octopus declined to comment on what would happen to Shell’s existing fixed tariffs, saying the deal still needs regulatory approval.

The three deals all offer negligible short-term savings compared to Ofgem’s price cap. However, energy experts generally assume that this value will increase slightly in January. That means if you commit to it now, you may be able to make some savings later.

Octopus Energy offers a slightly better deal with a one-year fix at £1,818 below the new Typical Domestic Consumption Value (TDCV).

According to Uswitch, this would be a saving of £16 over the October 1 price cap, set at £1,834 a year for a dual fuel household paying by direct debit. You’ll save, but it’ll be a paltry £1.33 a month.

This is currently the best offer on the market Supply warehouseThe “Fixed Saver 7” tariff is available to new and existing customers. Households pay £1,775 a year, a saving of £59 a year or £4.91 a month.

However, to receive this offer, households must purchase other utilities from the company.

Below is the full list of Uswitch’s fixed plans:

Be careful with exit fees

Unlike standard variable plans, fixed plans tend to incur termination fees when you cancel the contract.

This can cost up to £200 per fuel depending on the provider and contract length.

For example, you will be charged £75 per fuel for EDF’s one-year contract and £200 per fuel for its three-year contract to “reflect the risks associated with offering a longer-term fix”.

British Gas customers will be charged £75 per fuel for a one-year contract and £100 for a two-year contract.

Is it worth repairing?

The volatility of the energy market makes it difficult to predict what bills will look like in a year. That’s why it’s difficult to say across the board whether a fixed price is the best option.

Some households have the certainty that if prices rise they will have to pay the same price. However, this means you’ll miss out on potential savings if rates drop.

The fixed contracts on offer appear cautious, probably because wholesale prices remain volatile and providers are hedging their bets.

Energy experts at Cornwall Insight believe it is unlikely that energy prices will fall significantly in the coming months.

Dr. Craig Lowrey, principal adviser at Cornwall Insight, said: “Our forecasts for 2024 show prices remaining well above pre-pandemic prices – something that is currently expected to continue to be the case for the rest of the decade.”

It is also worth remembering that the first three months of the year typically see higher wholesale prices.

You should also keep in mind that the basic fees are getting higher and higher.

Cornwall Insight predicts that under the price cap, the typical basic electricity price for households could reach 60p a day by next summer, while the basic gas price could be 30p.

This would increase your basic fee for next year to £328.50. A fixed rate can help protect you from further fee increases.

To get a fair comparison of whether it’s worth switching to a landline, you’ll also need to check the unit prices combined with the base rates to see how they compare to what you’re paying now.

Natalie Mathie, energy expert at Uswitch.com, said: “With the price cap predicted to rise in January, households on standard variable tariffs may appreciate the security that a fixed tariff offers.”

“Fixed tariffs can be similar in price to standard variable tariffs or slightly higher. However, you can be reassured that rates will not change for 12 months.”

“If you’re considering switching to a fixed price, be aware of any exit fees, which can cost up to £200 per fuel.” If you change your mind after the cooling-off period or find a better deal you want to switch to, you must possibly paying for vacation.

“Make sure you look at the unit price and base charge so you can understand how much you will be paying for your energy use and how this differs from what you are currently being charged.”