- Energy price cap level set by Ofgem increased today
- Fixed deals are currently much more expensive due to the crisis
- We explain whether sticking with the default tariff is a better idea
The energy price range goes up today, meaning the typical household on a standard variable tariff will see a £139 increase in their bills from £1,138 to £1,277.
There are millions of people on these types of tariffs and they are facing the biggest increase in bills since Ofgem introduced the cap in 2019.
But, this comes at a time when the industry is in crisis, with ten suppliers already shutting down due to rising gas wholesale costs and as a result, the advice to switch to a fixed deal has been flipped on its head.
Experts suggest that sticking to one SVT is likely to be better than fixing – and millions of homes are being moved from a supplier that has switched to a new one, cap for the next six months and so on during the winter. can protect them.
It may be a better value for customers to move to a default energy tariff rather than a fixed deal.
As of today, customers on the default tariff will typically see a £139 increase in bills – depending on usage, this could be a little less or a little more.
The new level is the biggest jump since the regulator introduced the cap in 2019, with most suppliers setting prices to the limit.
This was introduced to prevent providers from charging the rip-off price every year from households that do not switch.
However, the cap has been increased as a result of the passing of higher prices by suppliers onto consumers as a result of the increase in wholesale prices.
The limit will be reviewed again in six months’ time and will probably be raised on 1 April, with some experts estimating it could rise to around £300 – and the figure could be even higher. Depends on what happens in the next few months.
best fixed deal
People who are currently on fixed deals don’t have to worry about their bills rising because they’re locked into a contract – unless their supplier is busted, because the new provider doesn’t have to honor it. .
Meanwhile, those whose tariffs expire soon or customers want to switch to a certain deal will find that prices have risen in the past few weeks with prices hundreds of pounds higher than in previous months.
As a result, many are wondering whether sticking with the standard variable tariff might be their best option.
To compare, This Is Money takes a look at what are the ‘best’ value fixed deals currently on the market.
We analyzed five deals for a three-bedroom, semi-detached property, with prime energy usage set at a dual fuel tariff as evening and weekend.
While some were still available, they were far less than usual and, as anticipated, prices were quite high.
Review: The limit will be reviewed again in six months’ time and likely to be extended on April 1
1. Sainsbury’s Energy/Eon Next
The best fixed tariffs are either with Sainsbury Energy, which is run by Eon Next, or directly with Eon Next.
The tariff name with Sainsbury’s is Sainsbury’s Energy 2 Year Fix and Reward v20 while with Eon Next it is called Next 2 Year v7.
Both cost an average of £1,776 per year and are fixed for 24 months, with no early exit fees.
To be eligible, customers must agree to have a smart meter installed, if they haven’t already. This is a common strategy now used by suppliers to ensure that they hit their government installation targets.
How much more expensive than the price cap: £499
2. Scottish Power
Scottish Power is offering customers its fixed-price December 2022 M2 tariff for £1,784 per year.
The cost is fixed until 31 December 2022, with a fee of £60 charged if customers wish to leave early.
On this deal, customers will neither get green gas nor electricity. However, they will not have to install a smart meter.
The provider is still offering its Help Beat Cancer Green Fixed December 2023 CM2 online deal with green electricity at a cost of £1,796 per year.
How much more expensive than the price cap: £507
3. British Gas
The UK’s largest provider is still offering its HomeEnergy Secure Nov 2023v2 at an average cost of £1,928 per year.
This is fixed until November 2023 and customers have charged an early exit fee of £100.
However, with the tariff provider user green electricity.
The provider is also offering its Green Future Nov 2023v2 deal for an annual price of £1,964.
How much more expensive than the price cap: £651
It is believed that the next price range could rise to hundreds of pounds as a result of the crisis.
4. This energy
One of the largest suppliers, Ovo was one of the first to charge over £2,000 for a certain deal.
New customers will pay an average of £2,034 annually on 16 September 2021 for Ovo 2 Year Fixed Energy for an average of 24 months.
Paying by monthly direct debit, households will have to pay a month’s direct debit upfront and pay £60 if they want to leave the contract early.
How much more expensive than the price cap: £757
5. SSE Energy
SSE is charging £2,034 like Ovo on a 2-year Fix v9 deal set for 24 months.
Customers will not benefit from green electricity or gas but will not have to pay early exit charges.
If they choose this as their payment method then they will have to make one month direct debit advance payment.
How much more expensive than the price cap: £757
Experts believe the situation with energy prices will get worse before it gets better
worse before better
In the end, customers are currently much better off moving to an SVT if their fixed deal expires, thanks to offgame and government-provided protections.
While this is an uncommon situation, it is not yet known when it will resolve on its own or when families can expect prices to move towards more reasonable levels.
But experts believe that the situation will get worse before it gets better.
Richard Neudeg, …