Should I fix my energy prices? - Rest Less (2023)

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Harriet Meyer October 19, 2022

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Energy bills for the average household will be capped at £2,500 a year from October until April, the government has announced – more than £1,000 less than Ofgem’s proposed £3,549 cap.

The new energy price cap guarantee, combined with the previously announced £400 government rebate, will be a big help, but energy bills this winter will still be 34% higher than they were last year (with the rebate factored in). The guarantee will only last until April 2023, instead of two years as the government previously planned. It will launch a review to consider how households will be helped with energy costs from April.

The increases in energy bills are being made worse by the devastating situation in Ukraine, and the impact of government sanctions on Russian gas suppliers. However, the cost of wholesale gas was already soaring before the war broke out, leaving millions of households worried about how they’ll make ends meet in the months to come. Read more in our article The energy bills crisis: what can you do about soaring costs?

Many of us may be wondering whether it’s possible to switch to a fixed rate tariff to protect ourselves from future increases, if this is even an option, or what to do if we’ve recently locked into a fix that’s higher than the price guarantee.

Here we answer your questions about your options when it comes to energy tariffs. We’ll regularly update this as the news around energy costs changes.

Contents

  • Which tariff are you on?
  • What if I’ve recently locked into a fix?
  • What are the cheapest energy deals?
  • Should I fix my energy prices until 2023?
  • What can you do if you’re struggling to pay your energy bills?
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If you’re considering moving to a different energy tariff, your first step should be to establish which tariff you’re currently on. You’ll be on a variable tariff, the cost of which is determined by the price cap, if your fixed energy tariff has ended and you haven’t switched to another deal, or if you’ve never switched your energy tariff, or if you were with a supplier that’s gone bust and you’ve been moved to another provider. This means that the majority of UK households are currently on the energy price cap guarantee.

The cap gives an estimate of the maximum amount per year that an average household using a ‘typical’ amount of energy will pay. However, it’s by no means a limit, as if you live in a large property, or use a lot of energy, you’ll pay more than this. Read more in our article What is the energy price cap?

What if I’ve recently locked into a fix?

If you’ve locked into a fixed rate energy tariff at a higher rate due to recent energy price rises, your unit prices will be reduced by 17p/kWh for electricity and 4.2p/kWh for gas. The government says that energy suppliers will adjust fixed tariffs automatically, so you don’t need to take any action. If you want to leave your fixed tariff, you’ll need to contact your supplier and find out whether there will be a penalty to pay.

If you’re on a fix that costs less than the guarantee, you’ll continue on this until your fixed term ends. When your fix ends, you’ll be moved to the price guarantee rate.

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What are the cheapest energy deals?

Default tariffs are currently the cheapest option. In the past, you’d shop around for another competitive fixed rate tariff to move onto, as these lock in the unit rates and standing charges of your gas and electricity for a certain period of time. There are no fixed tariffs available at present that will cost less compared to the new price guarantee.

Should I fix my energy prices until 2023?

As of the government’s announcement that energy bills will be capped at £2,500 a year for a typical household, there are currently no fixed deals that will save you money. Read more about the new cap and how it works in What new energy measures mean for you.

However, this article will be updated if any new fixed rate deals appear on the market that could save you money.

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What can you do if you’re struggling to pay your energy bills?

It’s an extremely tough time for households battling rising costs across the board, from petrol, to energy, food and other general utilities. As a first step, it’s worth contacting your energy provider if you’re struggling and slipping into the red. They may be able to help with a payment plan, or make other suggestions. Read more in our article What can you do if you can’t pay your energy bills?

It’s important to check whether you might be eligible for some financial support from the government. You should have received a £150 rebate on your council tax bill to help with energy costs in April, if your home is in Council tax band A-D although many households have reported that they are still waiting for their payments to arrive.

The government has also announced a £400 energy grant to be paid to every household in the UK in October. The £400 payments replace the government’s earlier plans to provide a £200 rebate for every household in October. These rebates had to be paid back, whereas the £400 payments aren’t repayable.

Extra payments of £650 will also be provided to those receiving Universal Credit, Tax Credits and legacy benefits.

If you were born on or before 26 September 1955, check if you’re entitled to the Winter Fuel payment. This is a tax-free amount of between £100 and £300 to help pay your heating bills over winter, and the amount you receive depends on your age and anyone else in your household.

The government will also give an extra £300 to those receiving the Winter Fuel payment, with a further £150 payment to those receiving disability benefits.

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Alternatively, you may be able to get money off under the Warm Home Discount Scheme, which is a one-off £140 discount on your electricity bill paid to your supplier between September and March. Find out more in our guide Are you eligible for help with heating costs?

If your home is poorly insulated, you may be able to make improvements through installing insulation. You can find tips on how to reduce your energy bills in our article Energy saving tips: how to reduce your bills.

It’s also well worth checking whether you might be able to reduce some of your other outgoings, so you can free up a bit of extra cash to help you cover rising energy costs. Our article Seven ways to save on your household bills explains how you may be able to make savings.

Have you fixed your energy tariff, or are you considering doing so if this is an option for you? Are you worried about the current energy crisis and how you’ll cover your heating costs? You can join the community discussion, or leave a comment below. We’d love to hear your experiences.

Harriet Meyer

Harriet Meyer is Deputy Money Editor at Rest Less. An award-winning financial journalist, she has more than 20 years' experience writing about personal finance for broadsheet newspapers, consumer websites and magazines. Previously, she worked as editor of The Observer's 'Cash' section, and was part of The Daily Telegraph's Money team. She's also worked as a BBC producer on radio money shows such as Wake Up to Money. Harriet lives in South West London with her partner, and giant cat. She enjoys yoga and exploring the world in her spare time.

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