Energy prices could be about to rocket. Here's how to avoid a steep increase in your monthly payments.
EDF Energy has extended its fixed-term Blue Plus Price Promise Plan to 16 months.
This increase of three months means customers' monthly payments will be locked until December 2014, avoiding any price hikes during this time.
As winter approaches, energy companies will almost certainly start pushing up their prices and the number of fixed-rate tariffs on offer will increase.
But although the EDF extension makes it one of the longest-lasting tariffs, it’s not the cheapest deal out there.
Blue Plus Price Promise
EDF’s 16-month tariff costs an average of £1,209 per household and it’s the fourth cheapest fixed-rate tariff on the market.
[SPOTLIGHT]It is £211 cheaper than the UK average bill of £1,420, and it has the added flexibility of no cancellation penalties for leaving early.
The tariff is a good option for people who want the security of knowing exactly how much their energy bills will be for the next 16 months.
The ‘Price Promise’ aspect of the tariff means if another supplier offers a tariff which is more than £1 a week cheaper EDF will let customers know. This is for 'typical consumption' households, which is 3,300 kWh electricity (5,000 kWh for Economy 7 meters) and 16,500 kWh gas consumption.
The cheapest fixed-rate tariffs
The cheapest fixed-rate deal available right now comes from M&S Energy, which costs £1,139 and is fixed until September 2014. Npower is in second spot, with an average tariff cost of £1,181, which is £239 cheaper than the average.
However, although these are cheaper than the EDF tariff, they’re fixed for a shorter period of time. Prices will probably have risen over this period and therefore it could be cheaper to go for a longer tariff.
|
Provider |
Tariff |
Fixed until |
Average cost* |
Average saving when switching |
|
Fix & Save |
30 September 2014 |
£1,139 |
£281 |
|
|
Online Price Fix October 2014 |
31 October 2014 |
£1,181 |
£239 |
|
|
Online Fixed Price Energy November 2014 |
31 October 2014 |
£1,195 |
£219 |
|
|
Blue Plus Price Promise December 2014 |
31 December 2014 |
£1,209 |
£211 |
|
|
iSave Fixed v8 September 2014 |
30 September 2014 |
£1,225 |
£195 |
*based on a typical gas and electricity bill for someone who has never switched costing £1,420 (Source: OFGEM 2013). Figures from energyhelpline.com
Variable-rate tariffs
The alternative to a fixed-rate tariff is a variable rate one. These are typically cheaper than fixed deals but prices can change and at the moment they’re more likely to rise than fall.
The cheapest variable rate tariff comes from First Utility and it is £1,155 a year. Npower also has a tariff at an average cost of £1,156 a year but these are both more expensive than the market-leading fixed-rate offers.
How much you pay will depend on where you live and how much energy you use but as prices are set to rise imminently, a fixed rate could prove to be cheaper.
Switching energy companies
The key to saving money on your energy bills is making sure you’re on the most competitive tariff.
In fact staying loyal to one firm will almost always leave you paying more than you need to. One of the major reason people don’t switch more often is because it’s not always straightforward.
To move companies you need to give your new provider a Metering Point Administration Number (also known as the MPAN, or your 'Supply number'), and it should be able to do the actual transferring process.
It’s not a fun task but as the average saved if you can switch is around £300, it’s worth a few hours sifting through the paperwork. Our article How to switch energy supplier has more information.
Compare energy suppliers and see if you could save by switching