Energy Price Cap increases: should you stay with your tariff or swap? | Tenant news

Energy regulator Ofgem recently announced that gas and electricity prices are going up by 10% from 1 October 2024.

Under the new Energy Price Cap, the average annual dual fuel bill (paid by direct debit) is rising by £149 to £1,717. Prices are also expected to increase by a further 3% in the first quarter of 2025.

So, should you swap to a fixed deal?

Check your tariff 

Most people are on standard viable rates, which means it’s the supplier’s default rate. Suppliers can charge up to but not over the Energy Price Cap, which is set by Ofgem.

On a standard variable tariff, the price of energy usually changes every three months, when the Energy Price Cap is reviewed in January, April, July and October.

Your supplier will contact you if your rate changes - they might send a letter or email. 

Suppliers can charge different rates for their standard variable tariff, so it’s good to shop around. You can swap to another deal whenever you want.

What if I’m on a fixed deal?

A fixed energy tariff means your unit rates and standing charge stay the same for the length of the contract you agree with your energy supplier.

If the wholesale price of energy changes, you’ll still pay the rate you agreed on your contract. However, if the price of energy goes down, you may end up paying more than you need to.

If you need to know what rate you’ll be paying so you can budget, you might consider choosing a fixed tariff. 

A fixed tariff usually lasts 12 months, although you can sometimes fix for longer.

If you have 49 days or less left on a fixed tariff, you can switch for free. If you have 50 days or more left on your fixed tariff you might have to pay an 'exit fee' if you want to switch.

Stay or find a cheaper fixed deal?

There’s not a simple answer for this, unfortunately, but doing your sums helps.

Some energy suppliers may offer cheaper, fixed-price deals. However, while they offer certainty for a set period, you might find yourself stuck at the higher price if prices fall.

When considering fixed-price deals, Ofgem says people should seek independent advice from organisations like Citizens Advice and consider what is most important for you - the lowest price or the security of a fixed deal.

Price comparison website Uswitch warns people to check whether fixed deals had exit fees before signing up, look closely at forecasts, and at what is being offered. MoneySavingExpert has more information on switching.

Uswitch also has a handy online tool that allows you to find the best deals. Check it out.