Table of Contents
Several energy providers have launched new one-year fixed energy tariffs that undermine the October cap on rising energy prices.
British Gas, EOn Next and Outfox The Market have all submitted deals that, on an annualised basis, are below £1,717.
Signing a one-year fixed-rate contract could help some households save money on their energy bills.
Currently, most households have a standard tariff, with prices determined by the energy price cap.
Rates: Setting a fixed-rate contract for one year could help some households save money on their energy bills.
Outfox’s Fix’d Dual v1.0 deal on the Price Cap (October 24) is the cheapest one-year fixed tariff on the market right now, at £1,600, which is £117 less than the cap price, Uswitch.com said.
EOn Next’s Gust 12m v11/Next Fixed 12m v26 deal is the second cheapest one-year fixed-rate deal on the market at £1,626, Uswitch told This is Money.
British Gas’s 12M v15 fixed tariff is priced at £1,627, which is £90 cheaper than the October energy price cap.
Ben Gallizzi, energy expert at Uswitch, said: ‘Energy prices are set to rise for millions of households from October, so now is a good time to shop around for a fixed deal.
‘The cheapest fixed deal currently available is from Outfox The Market, at £1,600 per year for households with average usage, which is £117 less than the October price cap.
Who’s the cheapest? Outfox The Market currently has the cheapest one-year fixed-rate energy deal, according to Uswitch.com
‘E.ON Next’s annual fixed tariff is priced at £1,626 and represents a competitive saving of £91, making it the second best deal on the market. British Gas offers a competitively priced annual fixed tariff of £1,627, representing a saving of £90.
‘There are several deals offering households savings starting in October, so it’s worth acting quickly if you find one worth switching to.’
He added: “While the long-term outlook for energy bills remains uncertain, there are likely to be further price increases in January and deals could become more expensive over the winter. It is therefore sensible to lock in a lower tariff to provide price certainty before rates rise.”
The amount you pay for energy may depend on factors such as where you live, as the price cap varies slightly depending on your location.
Energy price caps: what is changing?
On 23 August, regulator Ofgem confirmed that the annual energy bill for a typical household will rise by £149 in October under the new price cap.
This means that people who use the average amount of gas and electricity will pay £1,717 a year for their energy, which is a 10 per cent increase compared to now.
The average household currently pays energy bills of £1,568 a year, with prices capped by Ofgem’s price cap.
No one knows what the next energy price cap will be, but analysts at Cornwall Insight said there will be a “modest further increase” in energy bills when the price cap changes again in January 2025.
The price cap was introduced in January 2019 to prevent energy companies from overcharging customers on variable tariffs.
Energy bills are rising due to the increasing cost of wholesale energy – the gas and electricity that energy companies buy and then sell to consumers.
Higher energy bills are a blow to hundreds of thousands of pensioners who will no longer receive Winter Fuel Payments worth up to £300 a year due to drastic cuts by Chancellor Rachel Reeves.
