Dosh dilemma – Should I fix my energy?

Janet’s had enough of sky-high energy bills. “I’m forever shouting at the kids to turn off the lights so we’re not wasting more energy,” she told us. “And now I’ve been told they may go up AGAIN in January? Seriously, who’s supposed to afford this?”  

Janet asked: “Will fixing my energy tariff help?”  

Well Janet, we hear you loud and clear - and so do the thousands of people we speak to every day. In fact, in the 12 months leading up to September 2024, we helped 17,050 people with utility grant assessments to ease their energy burden. 

Before you lock in that fixed rate, though, here’s what you should consider... 

Know your tariffs 

There are two main types: Standard variable tariff (SVT) and fixed tariff. An SVT changes depending on the price cap, while a fixed tariff locks in your rate. The energy price cap (the maximum price that energy suppliers can charge households for each unit of energy and standing charges) doesn’t apply if you’re on a fixed tariff.   

Stability   

A fixed tariff keeps your rates steady, no matter what happens with the energy price cap. So, if you prefer to know what your bills are each month, this could give you peace of mind. 

Missed savings if prices drop 

On the flip side, if energy prices drop while you’re on a fixed tariff, you’ll still be stuck with the higher fixed rate you agreed to and could be paying more than needed. 

Which deals are worth considering 

Predicting energy prices is not an exact science but if you find a fixed deal that is anything up to 1% above the current (Oct-Dec) price cap, Money Saving Expert says it looks like you should save money over the next 12 months. 

Fixing for longer 

The further into the future you look, the harder it is to predict energy prices. That means a long-term fix could be risky. It might pay off, it might not.  

To sum up 

Well Janet, there’s a lot of educated guesswork involved. But opting for a one-year fix - as long as it isn’t more than 1% above the current price cap - could be a savvy move. Anything longer than that depends on your appetite for risk.