- Only 11 of 383 fixed rate rates are cheaper than remaining at a variable rate
- Charity group criticizes ‘exorbitant’ tariffs for abandoning energy deals early
Less than 3 per cent of fixed-rate energy deals work out cheaper than Ofgem’s maximum price, and many come with high exit fees for those who want to switch.
Charity group Warm this Winter said 292 fixed-rate tariffs (76 per cent) out of 383 cost at least £1,690 a year, the current level of the average. Ofgem capped price invoice.
Only 11 fixed-rate energy deals (2.8 percent) offer rates lower than the current price ceiling.
This comes as experts predict the energy price cap should fall slightly this year, dragging down household bills.
The energy price cap is set by regulator Ofgem and limits how much companies can charge households in variable tariff energy deals, paying by direct debit, for gas and electricity units and standing charges.
Cornwall Insight analysts predict the average capped bill price will fall to £1,559.61 a year in July.
It is then forecast to rise to £1,636.44 in October and rise slightly again to £1,634.20 in January 2025.
That means anyone on a fixed-rate fee and paying more than the capped rates may end up stuck at more expensive rates than the open market and face high fees for switching early.
Most households have variable rate agreements with energy caps, not fixed rates, as when energy prices began to rise in late 2021, almost all energy companies began to stop offering solutions.
This came as dozens of energy suppliers collapsed as rising energy prices forced them to buy energy for far more than they could charge consumers, thanks to fixed tariffs that locked in prices for their customers.
Although tariffs are returning, most fixed energy tariffs are more expensive than the maximum price or only for existing customers.
| energy company | Average departure fee |
|---|---|
| scottish power | €274.66 |
| E.In Next | €188.89 |
| EDF Energy | €182.01 |
| British gas | €162.20 |
| Utility Warehouse | €127.23 |
| Ovo Energy | €113.55 |
| Source: Warm this winter. Figures based on dual fuel rates available after April 2022 | |
Beware of Fixed Rate Energy Output Tariffs
Scottish Power customers face the highest energy bill exit rates, research shows – these costs have increased by 345 per cent in the last three years across all companies.
On average, Scottish Power charges exit fees of £274.66.
Exit fees are paid when you leave a fixed rate energy deal before the end of the term, usually 12 months.
But 256 of the 383 fixed rate fares on the market have exit fees of more than £100, or 67 per cent.
Researchers found departure fees have risen 345 per cent from an average of £42.06 at the start of 2021 to a high of £187.21 this month.
Warm This Winter spokesperson Fiona Waters said: “Once again, energy suppliers are letting their customers down, with many locked into fixed tariff deals they cannot get out of due to exorbitant exit fees.” It’s Hobson’s Choice for those who want the peace of mind of a fixed rate but are likely to end up worse off later this year.
“It is simply ridiculous and unnecessary that ratepayers have to navigate such a complex rate system where they are scammed at every level, from rising fixed rates to gas company speculation, and still face bills that are 60 percent higher than three years ago.
Simon Francis, convener of the End Energy Poverty Coalition, said: ‘Exit tariffs have gone from a minor irritation to a serious concern. Customers who have had poor customer service may now find themselves stuck with their provider because of these penalties.
‘The energy industry is quick to promote the idea that switching will save you money, but the reality is the fine print could leave customers on the hook for money.
“Households who suffer the most are often those seeking greater security through a fixed tariff, but we urge them to do so only if they are absolutely sure it is the right thing to do.”
Scottish Power has been contacted for comment.