This guide discusses what a fixed price energy tariff is, the advantages and disadvantages of them, and how to switch to one.
What is a fixed price energy tariff?
Fixed price gas and electricity tariffs ensure that the price you pay for each unit of energy will be the same throughout the length of the contract (which is between one and four years). This does not necessarily mean that you will pay the same amount on bills each month, as the unit price is fixed – the more units of energy you use, the more your bills will be. This means that if your supplier’s prices rise, this will not affect your bills.
This is different from a variable tariff, which has a certain defined price for the use of energy, but these prices can change. There is also no contract, whereas there is one for fixed energy tariffs.
What are the benefits of a fixed price energy tariff?
Fixed-price energy tariffs are often cheaper than variable tariffs – according to MoneySuperMarket, a fixed tariff with one of the Big Six energy suppliers can save you £295 per year. Also, you will be protected from energy prices increasing since your rates are fixed. It is also easier to manage your budget if you know the cost per unit of energy throughout the contract, as your bills will be the same if you use the same amount of energy each month. You also have a wide choice of supplier, since most suppliers offer a fixed tariff.
Are there any downsides?
Although you are protected from energy prices increasing, you will not take advantage if the costs go down. Also, you may have to pay exit fees if you decide to switch before the end of your contract. These can range from between £25-£50.
What to Do at the End of Your Fixed Tariff
At the end of the tariff, you should find out which plan your supplier will move you to. This will likely be the supplier’s ‘Standard Plan’ (which is variable). You may be offered the chance to take a fixed tariff again, so you may wish to do so. Once you know which plan you are being moved to, you can compare energy
plans online to compare it to other deals, or switch energy supplier if you could save more with a different supplier. You will have a specific date that it ends at, but you can switch your tariff 49 days before the end date without an exit fee.
Can I switch to a fixed price energy tariff?
Yes, and the process is handled by the company you are moving to. Switching energy suppliers is now easier due to the Energy Switch Guarantee, which means you are guaranteed to a switch within 21 days. You will stay on your current tariff until the process is complete, and you will not be without gas and electricity at any moment. When you switch, credit from your old account will be refunded within 14 days of your previous energy bill, and if you change your mind within these 14 days, you can stay with your previous supplier.
Compare Fixed Price Energy Tariffs
You can compare fixed price energy tariffs
with us at usave. You need to provide some details, such as your postcode and approximate energy usage, and will you be provided with a list of quotes in a matter of minutes. It is a good idea to compare whether it is cheaper to get gas and electricity from the same supplier or different ones to get the best energy deal.