Martin Lewis' official website, Money Saving Expert, has issued a stark warning for anyone who is considering locking into a fixed-rate energy deal. With energy bills set to fall by an average of 17 per cent as of next month, many firms across the UK are starting to offer fixed-rate deals for existing customers once again.
These deals offer protection over Ofgem price cap rises, however, if prices fall you may be in-turn stuck paying higher fees than others. Said price cap is set to fall to £2,074 per year for households using typical amounts on direct debit plans as of July 1, substantially less than the £2,500 per year under the Energy Price Guarantee.
However, the drop will be far less in reality, when you consider that the £400 energy discount that people received last winter has not come to an end. Top analysts at Cornwall Insight expect that typical bills will fall again to £1,959 per year as of October, but they could in-turn surge once more to £2,026 as of January 2024.
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The Mirror reports that based on these predictions, the MSE team has detailed what you need to know should you have been offered a new fixed deal. They said: "Based on current predictions, a fixed deal under July's price cap looks to be a decent deal, while anything on or just above it could be worth considering if you value price certainty."
Four major energy companies are now offering fixed deals to selected existing customers:
So Energy: 12-month fix from 1 July 2023 - £2,036 a year with typical use (£150 exit fee)
British Gas Select Jul24: £2,044 a year with typical use (£200 exit fee)
E.ON Next Loyalty Fixed v3: £2,050 a year with typical use (£150 exit fee)
Ovo Energy 1 Year Fixed: £2,220 a year with typical use (£150 exit fee)
Should you be leaving a fixed energy tariff and fail to renew, you'll automatically be moved to your supplier's standard variable tariff (SVT) - which pay the rates set by the existing Ofgem price cap. The following average rates for direct debit customers on SVT will kick in as of July.
7.51p per kilowatt hour (p/kWh) for gas
30.11p/kWh for electricity
A standing charge of 29.11p per day for gas
A standing charge of 52.97p per day for electricity
The price cap limits what you pay for each individual unit of gas and electricity used, as well as the maximum daily standing charge. While there isn't a total amount on how much you'll pay a year - the headliner figures are used to illustrate what someone with a typical usage can expect to pay.
If you use more or less energy than the average household - your bill will fluctuate accordingly.
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