- The new fixed rate lowers Ofgem’s maximum price and offers significant savings on the bill
EDF has launched the cheapest fixed rate energy deal on the market, costing £1,588 a year for average gas and electricity usage.
The Simply Fixed Direct 1y Nov25 offer means a typical household would save £129 a year from now to 31 December, then £109 from 1 January to 31 March.
This compares to energy deals limited by Ofgem’s price cap, which most households still maintain.
The price cap limits how much energy companies can charge customers in variable rate deals for gas and electricity units, as well as fixed daily charges.
The typical household now pays £1,717 a year on a capped price deal, meaning EDF’s new fixed rate could save users £129.
Price cap – Decided by regulator Ofgem and sets a maximum amount of how much energy companies can charge customers per unit of electricity or gas they use.
However, Ofgem’s price cap is reset on January 1, 2025.
The current prediction is that it will fall to £1,697, according to Cornwall Insight analysts, who have correctly predicted price cap movements since energy bills started rising in late 2021.
However, EDF believes that the maximum price will increase in January to £1,736.
If Cornwall Insight is right, agreeing to the deal with EDF would mean the average household would save £109 a year from January. If EDF is right, the saving would be £148. The maximum price is reset again in April, July and October.
Is it a good idea to accept the EDF rate?
One risk is that energy prices fall, causing users to pay more for gas and electricity since their unit rates are fixed.
However, in an unusual move, EDF has waived exit fees for the Simply Fix Direct deal from 11/25, as long as customers sign up through EDF.
That means all households have to do is find a cheaper deal and switch, without paying fees.
EDF retail director Rich Hughes said: ‘At this time of year people use more energy and are more concerned about the cost of their energy bill. We want to help in any way we can and have taken advantage of the drop in wholesale prices to offer another market leading offering.
“The market remains unstable and as most customers on the standard variable rate are likely to face another increase in January, customers still on that rate could benefit from signing up for this rate.”
EDF also offers a 12-month trailing tariff, which costs £50 below the maximum price, with the savings coming from ongoing charges rather than unit prices.
The energy provider has also increased the amount of cashback customers can earn when they refer their friends to EDF.
Until November 17, customers will get £75 for every successful referral they make and your friend will enjoy £50.
Existing customers can sign up for the new rates with EDF’s MyAccount, while new customers can get a quote and sign up on the EDF website.
