Can You Save Money By Switching To A Fixed Energy Tariff Before October 2022?

As the UK approaches a difficult winter for household finances, what do we know about the cost of energy over the next few months and what actions can you take to put yourself in the best possible position?

There are no simple answers, but the most important thing is to know the facts and work out which options are right for you. This isn’t a situation where everyone should do the same thing - it depends on your circumstances.

What we know ahead of the October 2022 energy price cap increase

Energy prices have been rising throughout 2022. A 54% increase came into effect on April 1^st. The next increase comes into effect on October 1^st, and another on January 1^st, 2023 (Ofgem confirmed on 4^th August 2022 that the price cap will now be amended quarterly).

While the UK Government has announced that it will replace the price cap with an Energy Price Guarantee that will ensure typical UK households pay no more than £2,500, bills will still increase substantially on October 1.

What are your options?

Energy prices are predicted to remain high for 2023 and perhaps even into 2024, so suppliers aren’t offering any cheap deals to try and woo customers from their competition. It’s just not worth it to them.

There are a lot of talks right now about whether consumers should switch to fixed price tariffs from variable tariffs, to at least give them some certainty about future payments. This may be an option for you, but here’s what you need to check.

Fixed-rate vs standard variable tariffs

“Standard variable” is an energy supplier’s default tariff. These rates offer you flexibility. You’re not tied into a contract with a fixed end date, and you won’t be charged any exit fees should you wish to switch suppliers. But there’s no protection against price increases on a standard variable rate, and it’s often not the cheapest available.

 A “fixed rate” is exactly that; you pay an agreed amount for each unit of energy until a set end date. Fixed rates last anything from one year to a five-year period.

These rates offer peace of mind – you know how much you’re going to pay. However, you’re locked into the deal for a set period. If prices begin to fall, you’ll still be paying the rate agreed at the outset.

Should I think about switching?

The questions you might ask yourself are: Have I got the flex in my household budget to pay more for the next 6 months so that I can benefit from reductions from the peak, that may come in quarterly reviews from April 2023?

Or would I rather lock in a rate and know what I’m paying, even if that turns out to be slightly more over the whole term of the contract?

Where to look to compare costs

Once you’re sure you know which tariff type you are currently on and how you would rather handle the next few months, you can use comparison sites like Money Supermarket or USwitch to see what options are available.

As well as looking at energy in isolation it’s possible you might also be able to make savings by combining energy supply with other services like phone and broadband. Some major suppliers, such as Shell Energy, offer discounts on your energy bill for signing up for other services.

Whichever route you decide to take, the most important thing is to check all your options carefully. You can find a range of gas and electricity suppliers to compare via Give as you Live Online and you’ll be raising vital funds for your favourite cause to help someone else, at no cost to you, at the same time.

Fundraising doesn’t need to be extraordinary. Just give as you live your ordinary life.

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