Run an energy comparison and save an average of £387*
*You could save an average of £387: Between 1 January 2020 and 30 June 2020, people who switched energy supplier for both gas & electricity with Uswitch saved an average of £387.
A fixed price energy tariff is a plan offered by various energy providers that locks in your rate for a designated period. These terms last usually between one year and 18 months, during which time the rate you’re charged will remain frozen, so you’re never faced with unexpected price increases. In some cases, a fixed price energy tariff can last up to three years.
Committing to a fixed price energy plan does not mean that you’ll pay the same amount each month. What you pay, of course, depends on your personal energy usage – but it’s the rate at which you pay (cost per kWh) that will remain frozen. Your bills will always reflect the amount of energy you consume, a fixed price plan will not change this. In most cases, the standing charge (the amount you pay your provider for supplying the energy) will also freeze during this period.
It’s important to note that with a fixed price tariff, even if the standard rate goes down, you will still pay the same, which means you may be taking a gamble by entering this scheme.
Should the standard rate increase during your fixed period, you’re sure to make some savings. However, because fixed rate energy plans will usually have a higher starting rate than variable rate plans if the rate does not grow in that period, you may end up paying more than if you hadn’t opted into the plan. There’s also the chance that standard rates may actually decrease, and if you’re committed to a fixed plan when this occurs, you’ll end up paying more.
Furthermore, many of these plans come with early exit fees, in which you’ll receive extra charges (typically between £25 and £50) should you need to switch tariffs before the fixed period terminates. Fixed plans that offer 18 months at a minimum should be very carefully considered because of this. Variable rate plans, on the other hand, are often open-ended, so you can exit your contract at any time without facing fees.
Fixed price tariffs are not for everybody. You need to really consider your circumstances and the aforementioned risks when deciding between fixed or variable energy plans.
If you can see yourself moving home within the next couple of years, it may be best to opt for a variable energy plan in order to avoid early exit fees. Many providers will allow you to transfer your fixed plan to a new home – but make sure to check before you commit, and remember that the fixed rate may change if you’re moving to a new area.
Ofgem’s energy price cap prevents suppliers from overcharging customers, but this cap only applies to variable rates. On the other hand, most fixed energy tariffs will offer prices below the cap, but be sure to check.
For many, the benefits of a fixed plan far outweigh the limitations, but it does always depend on your specific circumstances.
Fixed rate energy is available as a dual fuel plan from many providers, meaning both your gas and electric will be included under one contract. When you compare different fixed rate plans with Money.co.uk, you will be able to filter your search to display only fixed rate contracts offering dual fuel plans.
With almost every major UK energy supplier now offering fixed plans, the rates are extremely competitive. Deciding the best fixed rate plan for you depends not only on the price you’re willing to pay, but also on the length of the contracts on offer and any additional terms or fees that may be included. Here are a few important things to consider:
The starting rate for the fixed price plan
The length of the contract
Additional services such as green plans, paper billing, and rewards
What the early exit fees are
If you can transfer your plan to a new home within the fixed period
The best fixed price energy deals for you will depend on these factors and which are most important to you. There are so many different plans available from many different suppliers, so you’re sure to find one that best suits your requirements.
Applying for a fixed price gas and electric plan is no different than applying for a variable plan. The Energy Switch Guarantee, which applies to 90% of UK suppliers, means that your new supplier will handle the entire transition without you having to worry about the admin. The switch will happen within 21 days, and you’ll remain on your former tariff until the process is complete.
Comparing plans with the Money.co.uk price comparison tool is the best way to enter a fixed rate energy plan; Money.co.uk offers detailed information on every fixed rate energy supplier in the UK and offers exclusive deals from many top providers. Before using the price comparison tool, make sure you have the following information:
Annual consumption in kWh or your annual, quarterly or monthly spend
Current energy supplier and tariff name
You’ll then be able to compare energy suppliers offering fixed rate tariffs and see how much you could be saving compared to your current plan.
Your supplier is required to remind you that your plan is set to end between 42 and 49 days before the end of the contract. If you choose to switch plan or provider within this notice period you will not face any exit fees. Fixed price tariffs are not renewed automatically at the end of their term, so it’s important to keep note of the end date and contact your supplier during the notice period if you wish to continue with another fixed rate plan.
You’ll automatically be switched to your supplier’s standard variable tariff when your fixed period ends if you have not already arranged otherwise – and this is usually the most expensive plan to be on. Even if you do wish to continue using fixed energy tariffs, you should make sure to compare your current supplier’s offerings with others on the market, as there may now be a better deal for you with a new provider.
Aside from fixed price electricity and gas plans, there are a number of ways you can control your energy bills and make sure you’re never paying more than you should be.
Using a smart meter could save you money as it can help you track and subsequently control your usage. This also saves you the effort of meter readings, and, with some providers, offers cheaper tariffs. The presence of a smart meter in your home won’t actively save you money if you aren’t using it to monitor and reduce your usage.
You can make a few small changes to your home to make it more energy-efficient. For example, draught-proofing is an important step, as better insulation means using less heating and therefore saving on energy costs. You can also save on heating costs by setting a timer on your heating and turning down your thermostat by even just a single degree. You should limit your tumble dryer usage – as tumble dryers use a great deal of energy. Switch to energy-saving lightbulbs and make sure you keep any appliances and lights switched off when not in use.
There are plenty of ways to reduce your energy consumption, and in turn reduce your bills, by making small changes around the house. Have a look at our guide to cutting energy costs for advice on keeping your bills manageable.