loveMONEY comment: switch energy NOW or be stuck overpaying this Winter
The savings you can make by locking into a fixed-rate deal are falling, but it’s definitely still worth doing. Act fast.
It’s no secret that many households are facing a particularly brutal Winter this year.
The Energy Price Cap jumped 10% at the start of this month, adding £149 a year to the typical household energy bill.
Those with especially high energy usage will see an even bigger increase.
What’s more, millions of pensioners are set to lose help worth up to £300 after the Government decided to means-test the Winter Fuel Payment.
Add to that the fact this is the first Winter since 2021 that millions of poorer households will not receive a Cost of Living Payment – also worth around £300 – and it’s not hard to see why so many people are worried about their energy costs as we head into the colder months.
Indeed, debt charity Citizen’s Advice warned recently that one in four people could be forced to turn off their heating as a result of sky-high energy costs.
So what can we do about it?
Switch energy NOW
One of the fastest and easiest ways to reduce your energy costs is to switch to a cheaper tariff.
Although energy switching became impossible once the energy crisis struck in 2021, competition has gradually been returning to the market.
Specifically, various energy suppliers are offering fixed-rate deals that undercut the Energy Price Cap, which is set by Ofgem and what the majority of people will be sitting on.
The bad news is the predicted amount you’ll save by locking into one seems to be falling at a rapid rate.
As recently as a week ago, we’d seen 12-month fixed-rate energy tariffs that were up to £150 cheaper than the Price Cap.
Today, the most a typical home can expect to save is around £90.
It’s impossible to say whether the savings on offer will keep dwindling, but there seems little point in waiting to see.
If you’ve not already locked into one, take a few minutes to do so now (this link will take you through to the Uswitch energy comparison page).
It’s really straightforward and will ensure your energy costs per unit are lower throughout the high-usage months, which make up the bulk of your annual energy bill.
These deals are usually fixed for around a year and, while we don't know what will happen to prices far into the future, analysts are fairly sure Ofgem's Price Cap will remain broadly unchanged until the Spring.
There are even deals available that don’t require a smart meter for those who really aren’t keen on the devices.
Shop around for a cheaper energy deal now and save up to £90 (opens in new page)
If you really can’t be bothered to switch to another provider, at least visit your current supplier’s website to see if it is offering a fixed deal below the current Price Cap.
As a general rule, anything that's lower than the Price Cap at the start of the high-usage months will likely save you money over the next 12 months.
Other steps you can take
Switching to a cheaper deal won’t solve all your energy worries but, as we said earlier, it is the fastest and easiest single step you can take to notably cut costs.
If you’re still concerned about your bills this Winter, there are many more steps you can take, which we’ve outlined here.
If you’re really struggling to pay your bills, it’s important you also check what help is available to you.
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