Scottish Power launches the longest ever fixed-price energy tariff

Scottish Power has launched a new energy tariff fixing your bills until 2016. But is it a good deal?

The competition between energy providers has picked up this week as Scottish Power launches the longest ever fixed-rate tariff of three years.

This gives you the security of paying one fixed amount for the full period of the tariff, so you are protected from any price rises during this time.

Scottish Power tariff

Customers can now fix their energy tariff with Scottish Power for an average yearly price of £1,301.

This means people on this tariff won’t see a change in their payments for 36 months so it’s a good option for someone wanting the security of being covered. But there are quite high exit penalties of £50 for a dual fuel deal.  

npower also launched a new deal this week, for a shorter fixed-rate period of two years. This is the second longest on the market and prices are fixed until December 2015, at an average of £1,305 a year, so slightly higher than the Scottish Power deal.

The pros and cons of a long-term tariff

A long-term energy tariff offers security as the payments will stay the same over the term. But these are historically more expensive than variable deals and if prices aren’t changing, you could end up paying a lot more on a fixed deal.

There is also a new one-year tariff from npower which costs on average £1,184. This is £117 cheaper than the Scottish Power deal, but the risk you take with this one is that after a year you could be facing much higher bills

Price rises

[SPOTLIGHT]During the past year all the major energy suppliers, and some smaller ones, have pushed prices up leaving customers with little choice but to fork out more.

Therefore a fixed-rate deal, such as those in the table below, is a tempting idea to customers.

But it’s only a good deal if you’re going to save money. If you went for a shorter two-year deal, such as the EDF tariff, for example, you’d save £218 over two years compared to the tariff from Scottish Power.

Unless prices went up substantially, which given recent rises isn’t entirely unlikely, it could be cheaper to do this and then switch to a cheaper deal after the two years. As new customers tend to get the best deals anyway, this could be a better option.

The cheapest fixed rate deals (two years and longer)

*based on typical gas and electricity bill for someone who has never switched costing £1,420 (Source: Ofgem). Source: Energyhelpline.com

Cheapest fixed-rate deals

In the table below you can see all the cheapest fixed-rate deals around.

For a two-year fixed rate EDF remains the cheapest, with a yearly price of £1,192 which works out at £109 cheaper per year than the Scottish Power deal.

*based on typical gas and electricity bill for someone who has never switched costing £1,420 (Source: Ofgem). Source: Energyhelpline.com

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