The latest cut to the energy price cap means that it could soon be worth shopping around for the best fixed-price energy tariffs. Consumers have been unable to shop around for the best energy deals since the start of the energy crisis in October 2021, where wholesale energy costs soared amid financial and political instability.
Rising wholesale energy costs caused disruption to the energy market leading to many suppliers going bust. As a result, over 2 million consumers were forced to move suppliers through no fault of their own - many of whom ended up on a higher tariff than they were previously on. Consumers were provided with some protection from the hike in energy prices, however, firstly through the energy price cap set by Ofgem and then subsequently via the Energy Price Guarantee (EPG) - a government subsidy that ensured consumers paid a maximum of £2,500 per year based on an average dual-fuel household.
Compare the cheapest energy deals
The energy price cap fell to £2,074 at the start of July 2023, the same time as the Energy Price Guarantee increased to £3,000, meaning that energy tariffs are once again capped by the energy price cap set by Ofgem, rather than the government-subsidised Energy Price Guarantee. Further good news arrived for energy customers when Ofgem announced that the energy price cap will fall to £1,923 on the 1st October 2023. The latest energy price cap reduction means that energy prices are now more stable and are steadily falling, the bad news is that it is unclear exactly how long this will last, with some predicting that it is likely to increase again in January 2024. For the latest energy price cap predictions, check out our regularly updated article 'Should I fix my energy prices?'.
Unfortunately, for most UK consumers, their current energy tariff is still likely to be the best deal. This is because most people are currently on a standard variable tariff which is capped by the energy price cap, which is £2,074 for the average dual-fuel household.
In order to make switching worthwhile, you would need to be able to source a fixed-price energy deal that is cheaper than the energy price cap, something that very few providers are currently willing to offer. You also need to keep in mind that if energy prices continue to fall, there may be better deals that come to the market in the coming months. So, fixing your energy tariff now will mean you are unlikely to be able to switch to a better deal until your current deal is up unless you are willing to pay a hefty exit penalty fee. We will continue to monitor the energy market and will update our article as soon as there are some competitive energy deals available.
Cheapest fixed-price energy deals compared
There are currently very few fixed-price energy tariffs on the market that can beat the rate that is capped by the energy price cap. The few deals that have surfaced have been quickly snapped up and then withdrawn from the market and most are only available to existing customers. We expect there to be more competition in the energy market in the coming weeks and we will continue to update this article as and when new deals are released. Any deals listed are correct at the time of writing and are subject to change at any time. Remember, if you decide to fix your energy tariff then you are committed to that rate for the duration of the fixed period and you are unlikely to be able to switch to a better deal without paying an exit penalty.
|Tariff||E.on Next 12-month Dual-Fuel Plan - 'Next Fixed 12m v2'||So Energy 12-month Dual-Fuel Plan - 'So Juniper'||Sainsbury's Energy 12-month Dual-Fuel Plan - 'Fix and reward'|
|Who can get it||New and existing customers||New and existing customers||New and existing customers|
|Exit fees (payable if switching before 12 months is up)||£75 electricity-only plan - £150 dual-fuel||£150 dual-fuel||£150 dual-fuel|
|Approximate annual savings based on typical annual dual-fuel direct debit bill||£35 approx||£20 approx||£20 approx|
|Is the fixed rate lower than the current energy price cap (£2,074)||Yes||Yes||Yes|
|Is the fixed rate lower than the energy price cap from 1st October 2023 (£1,923)?||No||No||No|
|Who should switch?||Those who want the assurance of knowing how much they will pay for their energy over the next 12 months. This plan is slightly more expensive than the new energy price cap from 1st October 2023.||Those who want the assurance of knowing how much they will pay for their energy over the next 12 months. This plan is slightly more expensive than the new energy price cap from 1st October 2023.||Those who want the assurance of knowing how much they will pay for their energy over the next 12 months. Again, this plan is slightly more expensive than the new energy price cap from 1st October 2023. New customers will receive 2,000 Necar points per fuel. Dual-fuel customers get triple points when spending in-store at Sainsbury's.|
How to switch energy providers
If you have found a suitable energy deal and are willing to switch energy providers then you should complete the following steps.
- Check and make sure that the deal you are switching to is the best option for you. Double-check the standing charges for both gas and electricity and ensure that the charge per kWh represents good value and is under the current energy price cap. Ensure that the period you are agreeing to fix for works for you and your family. Also, check the small print at both your new and existing supplier so that you are aware of any additional costs including administration and exit fees.
- Sign up to your new supplier, provide direct debit details where applicable and take final meter readings. This will ensure that your new supplier is able to create a new bill and allows your old supplier to send a final bill. A switch should usually be completed within approximately 15 days, although some suppliers provide extra flexibility allowing you to choose a switch date up to 28 days in the future.
Keep an eye on your account balance with your old supplier. Money should be automatically refunded to your account if you are in credit when you switch, however, it is worth chasing this if it has been received within 30 days. Similarly, if you were in arrears when you switched, you should ensure that the final bill is settled as soon as possible.
The switching process is relatively straightforward, however, if you have a smart meter, your new supplier may need to check on the type of smart meter to ensure it is compatible. Below, we explain an easier way to switch energy suppliers, using an auto-switching service.
Best way to switch energy tariff
Energy providers often reserve their best energy deals for new customers, however, once the offer period ends, customers will be switched to the provider's standard rate tariff. Many customers fail to shop around meaning they remain on standard variable rate deals, either unaware that better offers exist or unwilling to shop around for themselves. An automatic energy switching service will do the hard work for you, finding the best deals available and carrying out the switch on your behalf. Read our article 'Compare the best energy auto-switching services in the UK – save money on utilities without even trying' for more information.