Cheaper fixed energy deals could return ‘within weeks’ as prices drop
CHEAPER fixed energy deals could make a comeback within weeks as wholesale gas prices continue to fall.
Experts have said that the price drop could mean deals that are below the price cap being offered to customers later this year.
Millions of domestic customers could be offered more competitive deals, analysts at energy consultancy Cornwall Insight said.
The return of these deals would also give households the freedom to switch suppliers and lock in potentially cheaper prices.
Energy bills have soared since 2021 with suppliers withdrawing tfixed-rate tariffs.
Fixed-rate energy tariffs give customers bill stability over a set period.
Locking in the price means you can avoid bill hikes during that time. But you could end up stuck in a deal paying more if prices fall.
The majority of billpayers – around 26million – are now on standard variable tariffs that are subject to a cap.
The government’s energy price guarantee (EPG), has frozen average bills at £2,500 a year.
But as this is only an estimate for a typical household – if you use more energy you’ll pay more.
Now fixed deals could return as costs are falling, potentially saving billpayers money.
Kate Mulvany, senior consultant at Cornwall Insight said: “If supplier’s costs decrease and government-supported rates remain relatively high, it is likely we will see a significant revival in reasonably priced energy plans.”
The energy price guarantee will rise by a further £500 on April 1 – meaning a typical household on the standard variable tariff will end up paying £3,000 a year.
When will it happen?
It could happen as soon as April, according to experts.
Richard Neudegg, director of regulation at Uswitch said: “As we are seeing wholesale prices fall, it should start to be possible for suppliers to offer fixed deals that can beat the energy price guarantee level of £3,000 due from April.”
Cornwall Insight’s research suggests that the average bill could fall below this, to £2,200 from July.
Will prices definitely be cheaper?
No, we don’t know yet – but experts think it could happen.
Neudegg said: “It remains to be seen how competitive these deals will be, especially with the regulations currently making it even more difficult for suppliers to offer decent prices.”
He added that customers should have the option to choose long-term fixes to help with budgeting.
However, he added that some may be concerned about offering the cheap fixes due to volatility of energy prices.
What can I do now to lower bills?
The best way to lower bills at the moment is to look at how you can be more energy efficient.
In the short-term there may be easy switches you can do, such as turning of energy guzzling “vampire appliances” or by tweaking your thermostat setting.
Small simple tweaks could save you hundreds of pounds.
If you’re struggling to pay your bill then you should ask your supplier for help, as they may have a fund that you can apply for to get discounts off your bills or to help pay off debts.
You could also get in touch with your local council to see what help it is offering under the Household Support Fund.