MARTIN Lewis’ MSE has issued an urgent warning for anyone looking to snap up the “cheapest fixed” energy deal on the market.
MoneySavingExpert.com has warned an EDF Energy fixed deal is ending in just hours.
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Average annual energy bills fell by 12% on Monday, April 1, for those on standard price-capped tariffs taking the average bill down from £1,928 to £1,690 a year.
But that doesn’t mean bills won’t rise again during the next two energy price cap assessments this year.
It also means fixed tariffs might creep up in price.
If you are looking to move to a fixed deal then the cheapest one on the market is closing soon.
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EDF’s new “EDF Essentials 1Yr Mar25V6” tariff will allow customers to fix their energy prices at an average cost of £1,581.
For the average household, this will be £347 cheaper than sticking to the standard variable tariff (SVT) which is pegged to Ofgem’s price cap.
MSE said: “This tariff is 3% LESS than the prediction of where the Price Cap will be over the next year and, of course, as it’s a fix it has the benefit of price certainty.”
“It has low £50/fuel early-exit fees (waived if you switch to another EDF fix).”
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EDF has confirmed the deal will end on Thursday, April 4 at 4pm, so existing customers and new consumers with other energy suppliers have until then to switch.
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Customers wishing to sign up for EDF’s new fixed deal will pay the following rates for a period of one year:
- 5.62p per kilowatt hour (p/kWh) for gas
- 23.74p/kWh for electricity
- A standing charge of 32.04p per day for gas
- A standing charge of 40.78p per day for electricity
The deal is available to new customers currently with any supplier via Uswitch.com.
Existing EDF customers will need to contact the energy supplier directly to access the same deal.
You must have or be willing to have a smart meter installed to take advantage of this deal.
Should I move to a fixed energy deal?
Customers who lock into a fixed energy deal are charged the same gas and electricity rates during the term of the contract.
This means that prices will stay the same throughout and customers won’t face larger bills even if Ofgem were to increase the price cap.
But this also means that if prices fall, you could end up paying more than a new price cap.
This is the current price cap rates on a standard variable tariff:
- 6.04p per kilowatt hour (p/kWh) for gas
- 24.50p/kWh for electricity
- A standing charge of 31.43p per day for gas
- A standing charge of 60.10p per day for electricity
A typical household uses an average of 11,500kWh of gas and 2,700kWh of electricity every year, these rates will cap bills at roughly £1,690.
But as this is only an estimate for a typical household – so if you use more energy you’ll pay more.
Any fixed offer that is lower than the current cap is always worth considering.
But be wary that annual energy bills may drop further into 2024 when the next price cap comes into force in July.
Analysts at Cornwall Insight predict that bills will drop again in July to around £1,560 a year, rise to £1,631 in October and dip again to £1,634 in January, but those are only estimates.
What do the experts say?
HOUSEHOLDS that lock into a fixed energy deal are charged the same gas and electricity rates during the entire term of the contract.
The deals protect customers from bill hikes if Ofgem were to increase the price cap in the future.
Natalie Mathie, energy expert at comparison site Uswitch, says: “The energy market remains volatile, so it can be hard to predict whether opting for a fixed deal or sticking with a standard variable tariff will work out cheaper in the long run.”
If you lock into a fixed deal now and prices fall in the future, you will usually have to pay a hefty exit fee to switch back to the standard variable tariff.
But a fixed energy deal can be worth signing up for if you are after long-term peace of mind.
Emily Seymour, energy editor at consumer champion Which?, says: “As a rule of thumb, we wouldn’t recommend fixing anything higher than the unit rates or standing charges in your current deal, or for longer than a year.”
Other alternatives
If you don’t want to commit to a fixed tariff it’s always worth considering a variable tariff.
Kara Gammell, personal finance expert at comparison site Money Supermarket Group, says: “These will almost always be at or below the price cap.”
For example, E.ON Next’s Pledge variable tariff offers a fixed discount of around three per cent on the price cap rates for 12 months.
It will save the average household around £50 a year but comes with a £50 exit fee if you switch before the year ends.
The deal is available to both new and existing customers.
For a bigger reward but at a higher risk, Octopus Energy offers two variable tariffs which track wholesale gas and electricity costs.
Customers on the Octopus Tracker see their prices change daily, but unit rates have remained consistently lower than the price cap in recent months.
The Agile Octopus tariff works similarly to the Octopus Tracker, the main difference is the former’s prices change every half hour.
Remember that those wishing to switch to any of these tracker tariffs must have a smart meter.
How to find a good energy deal
To find a good deal you will first need to get an estimate of how much energy you are using every month.
It’s good to do a meter reading regularly to track this or install a smart meter.
It is worth sending these to your energy supplier and checking your bill accurately reflects what you are using.
Next, you’ll need to decide how much certainty you want over the price you pay.
You’ll then need to choose a fixed or variable energy tariff.
To find what is right for you have a look at price comparison sites to see what is the best deal for you and how much you could save against your current deal.
Bear in mind these won’t have every deal on the market so you still might miss out.
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If you find a deal you like reach out to the supplier directly to see if that’s the best price they can offer.
If you are looking to switch use an automatic switching service as they do most of the leg work for you.
What energy bill help is available?
THERE’S a number of different ways to get help paying your energy bills if you’re struggling to get by.
If you fall into debt, you can always approach your supplier to see if they can put you on a repayment plan before putting you on a prepayment meter.
This involves paying off what you owe in instalments over a set period.
If your supplier offers you a repayment plan you don’t think you can afford, speak to them again to see if you can negotiate a better deal.
Several energy firms have grant schemes available to customers struggling to cover their bills.
But eligibility criteria varies depending on the supplier and the amount you can get depends on your financial circumstances.
For example, British Gas or Scottish Gas customers struggling to pay their energy bills can get grants worth up to £1,500.
British Gas also offers help via its British Gas Energy Trust and Individuals Family Fund.
You don’t need to be a British Gas customer to apply for the second fund.
EDF, E.ON, Octopus Energy and Scottish Power all offer grants to struggling customers too.
Thousands of vulnerable households are missing out on extra help and protections by not signing up to the Priority Services Register (PSR).
The service helps support vulnerable households, such as those who are elderly or ill, and some of the perks include being given advance warning of blackouts, free gas safety checks and extra support if you’re struggling.
Get in touch with your energy firm to see if you can apply.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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