Fix your energy bills for four years with Sainsbury’s

Sainsbury's has launched a new tariff which will lock in energy prices until 2018. Is it worth the added cost?

Sainsbury’s has launched a new fixed price energy tariff which will lock in your gas and electricity bills until April 2018.

It costs an average of £1,316 per year, which is a lot more expensive than many other tariffs. Is it worth paying extra?

Fix to April 2018

Signing up to a fixed rate energy tariff gives you some peace of mind as you know exactly what you are going to be charged each month. You won't need to worry about the next round or two of energy bill price rises and it's easier to work out your budgets.

The new tariff from Sainsbury’s, Fixed Price March 2018, costs an average of £110 a month for dual fuel bills. On top of this you’ll also collect up to 600 Nectar points when choosing the deal. If you cancel before the end of the term you’ll pay a penalty fee of £50 for each fuel - so a £100 hit if you cancel a dual bill.

Choosing the Sainsbury’s tariff works out at an extra £52 per year compared to the standard bill of £1,264. But you’ll be free from potential rises during the next four winters.

The second longest fixed rate tariff comes from Npower at £1,212 a year, £104 cheaper than the Sainsbury’s tariff. It’s the Price Protector December 2017 and will lock prices in for almost four years. EDF and Co-operative Energy both have tariffs which last until March 2017 which these cost £1,202 and £1,226 respectively.

The table below shows the longest fixed rate tariffs around today.

*saving calculated against an average bill of £1,323. Source: energyhelpline.com, 21/01/14. calculations are for an average usage dual fuel household paying by monthly direct debit. Average usage as defined by OFGEM is 13,500 kWh pa of gas and 3,200 kWh pa of electricity.

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The cheapest energy tariffs

If price is your main concern when looking at energy tariffs the cheapest available comes from First Utility and costs an average of £1,037 per year. It’s fixed until July 2015 and is significantly cheaper than the Sainsbury’s tariff. Ovo takes second place with its Cheaper Energy Fixed tariff costing £1,042 for 12 months.

Spark Energy provides an even cheaper tariff costing an average of £1,025 per year, but this is only if you pay the direct debit in advance which may not be suitable for everyone.

Here are the five cheapest tariffs available right now.

*saving calculated against an average bill of £1,323. Source: energyhelpline.com, 21/01/14. calculations are for an average usage dual fuel household paying by monthly direct debit. Average usage as defined by OFGEM is 13,500 kWh pa of gas and 3,200 kWh pa of electricity.

Fixed price versus variable tariffs

The kind of energy tariff you choose will depend completely on your own circumstances. A fixed price tariff will give you the extra security of knowing in advance what you'll be paying.

But that security comes at a premium - there is a difference of almost £300 in the new Sainsbury’s deal and the cheapest tariff on the market, from First Utility.

Therefore it is worth weighing up all the options before you decide. To find out how well the different energy companies fare for customer satisfaction read our article Customer satisfaction with energy providers hits a new low.

Compare gas and electriticy tariffs with lovemoney.com

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