The first fixed energy deal priced under Ofgem’s new cap and open to everyone has been unveiled this week.
So Energy, which has around 300,000 customers, is offering a 12-month fixed energy deal called So Juniper for £2,047 a year for a dual-fuel household based on Ofgem's typical use. This is £27 cheaper than July’s price cap, which will be £2,074, and according to Martin Lewis, that makes it 1.3% cheaper than what most households will pay under the new cap, and 18% cheaper than what we currently pay under the Government's Energy Price Guarantee (EPG).
The deal is open to new customers via comparison sites Uswitch and Confused.com and existing So Energy customers can access the deal directly.
Read more: Is now a good time to fix your energy rates as new deals start to appear?
However, there is a catch. The deal is available to a ‘limited’ number of customers on a first come, first serve basis and customers already signed up to Uswitch will have the first opportunity to take the deal. However So Energy told Money Saving Expert that it will monitor the launch and may open up availability further in the future although the firm is able to pull it from sale at any point.
Fixed tariffs virtually disappeared once energy prices started to soar in September 2021, and apart from a handful of customers who were lucky enough to sign up for a long fix at least 18 months ago, most customers are now paying for their energy at the Standard Variable Rate (SVR). However, in recent weeks , some energy suppliers have started to offer fixed deals to existing customers and often to only a limited number of households. British Gas, So Energy, E.on and Ovo have limited fixed deals on offer to their customers and Octopus Energy offers a Tracker tariff and its 'Agile' deal, an electricity-only tariff. These deals change prices regularly. The next best deal to So Energy's Juniper is a one year fix with Eon, costing on average £2,080 a year. However, it is only available for existing customers and ends on August 14.
Wholesale prices have dropped in recent months and with a lower price cap imminent, providers are only just starting to offer fixed energy deals again, but typically, they’ve been doing so only for existing customers. Uswitch has said they are “hopeful” that the launch of the deal to include new customers will encourage more providers to do the same.
Natalie Mathie, energy expert at Uswitch, said: “Most of the fixed energy deals currently available are for existing customers only, so the fact that we can offer this to new customers is an encouraging sign that competition is returning to the market. At £2,047 for the average household paying by direct debit, this is reasonably priced compared to the upcoming July price cap and could be worth considering."
Those who switch to So Energy’s new tariff will begin their fixed term from July 1. It will cost £75 per fuel to leave the tariff early, so £150 if you move both gas and electricity to another provider before the year is up. However, those looking to join should be aware that signing up to a fixed deal means locking in a price for the duration of the fix – although Marti Lewis reckons the deal is worth considering.
The deal will stand you in good stead as energy prices remain high but experts at Cornwall Insight have predicted the price cap will fall to £1,959 in October to December before rising slightly to £2,026 in January to March 2024, when costs increase due to hiked demand in winter months. You could find yourself paying more than other households. our bill will still depend on how much energy you use.
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Martin Lewis said; "Our current rule of thumb is that, based on current future predictions of energy prices, if any firm offers a fix for under the July price cap (so about 17% cheaper than current rates) that looks a decent deal. If it's the same or a little more, it may still be worth considering for the sake of price certainty. Of course, current predictions are just predictions, so we can't promise to be right with hindsight. And it's worth noting that some of this is crystal-ball gazing and averaging, but if the future predictions are right, this tariff could be worth considering."
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