Money Wellness
Looking up at an electricity pylon at sunset
category iconbills
category iconcost of living
calendar icon24 Nov 2023

Should I fix my energy prices?

Ofgem has just announced that energy prices will rise by 5% in January. So if you’re being offered a fixed deal by your supplier, should you stick or twist?

How can you tell if it’s a good deal?

Unfortunately, it’s not easy. You’ll need to take into account what's expected to happen to prices over the next year.

As the price cap - the maximum rate suppliers can set for standing charges and a unit of gas and electricity – changes every three months, this can be tricky.

We know the price cap will rise by 5% from 1 January. This means the typical household will go from paying £1,834 a year to £1,928 a year.

According to the experts at Cornwall Insight, rates are then expected to fall by 6% in April, and another 1% in July before rising again by 2% in October.

But, and it’s a big but, a lot can change in the space of a year.

So should I fix or not?

It can be difficult budgeting if you don’t know how much you’ll be paying for energy in six months' time.

Fixing could give you valuable certainty. You need to weigh up whether knowing how much you’ll be paying every month is worth the risk of overpaying if prices fall more than expected.

Bearing in mind what's expected to happen to energy prices over the next year, if you get offered a fixed deal that’s less than - or even about the same as - the current price cap (£1,834 for a typical household), it may be worth considering.

How to compare a fixed deal with what you’re paying now

You might get a quote based on your annual usage rather than that of a typical household.

If that’s the case, use the price cap unit rate and standing charge information below to work out if it’s a good deal.

 

Price cap prices for October to December

Electricity

27p per KWh
Daily standing charge: 53p

Gas

7p per KWh

Daily standing charge: 30p

Remember, anything around or below these prices may be worth considering.

If you’re struggling to pay your energy bill

The first thing you should do if you’re struggling to pay your energy bill is contact your provider. A lot of suppliers offer financial support to qualifying customers who have money problems.

You may also benefit from debt advice if the cost-of-living crisis means it’s difficult to make ends meet. We’ll be happy to help with this.

Avatar of Rebecca Routledge

Rebecca Routledge

A qualified journalist for over 15 years with a background in financial services. Rebecca is Money Wellness’s consumer champion, helping you improve your financial wellbeing by providing information on everything from income maximisation to budgeting and saving tips.

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