Best energy deals: With the Ofgem price cap rising you should switch

Households could save up to £234 a year by switching energy providers as the price cap increases today, new research indicates. 

Customers on expensive default tariffs are encouraged to shop around as the Ofgem cap rises from £1,042 to £1,138 for an estimated 11million people.

The £96 hike, announced in February, only affects those on prepayment meters or standard variable deals, meaning those who switch to fixed options could save hundreds each year.

There are currently 62 fixed deals on the market cheaper than the new energy price cap, according to data from Uswitch.

Households have been told they could save hundreds each year by switching to a fixed tariff

The price cap was launched in January 2019 by watchdog, Ofgem, as a way of keeping down the cost for households across the UK.

However, it is now increasing to £1,138 with the hike of £96 including an additional £23.69 energy suppliers can charge a year to help them cover for coronavirus-related costs.

Despite initially being billed as a temporary measure, it has been in place for over two years with the limit reviewed every six months.  

It has faced criticism as suppliers have been accused of using the cap as a target rather than a limit.

As it stands Eon, Npower, EDF, British Gas and Scottish Power have all confirmed they are increasing their prices in line with the cap – an increase of 9 per cent for customers. 

With nearly 60 per cent of the UK is on these pricey default tariffs, millions could save by switching suppliers. 

The Ofgem energy price cap is rising from £1,042 to £1,138 for an estimated 11million people 

Saving money is even more important for households at the moment as many are suffering financial difficulties due to the pandemic. 

One way of doing this is keeping energy bills low but, with more people at home, these are rising too with a third of adults spending £36 more than usual on their energy bills each month during lockdown last year, according to research from Confused.com.

Max Green, energy expert at Confused.com, said: ‘Even if the price cap doesn’t affect you, the best way to save money is to shop around as it’s likely that we’ll see fixed tariff rates go down and new deals come to market.

‘If you don’t switch, you will automatically be put on a default tariff at the end of your current tariff, so it’s important to keep an eye out for a better offer.’ 

Sarah Broomfield, energy expert at Uswitch, added: ‘Switching to a fixed tariff is the only way to escape market volatility – and the unpredictability of the price cap.

‘Many households are struggling with their finances as a result of the pandemic, and moving from a default standard tariff can save consumers hundreds of pounds a year.

‘Consumers could be £234 better off by fixing their energy for 12 months with one of the cheapest tariffs on the market, which is a substantial saving for anyone who is out of contract with their supplier.’

Consumers are encouraged to shop around to find the best deal as the price cap rises today

What are the best fixed deals on the market?

There are currently 62 fixed deals cheaper than the new price cap limit, according to Uswitch.  

The cheapest fixed deal is the HUB Smart Choice Tariff 12 April 22 v1 tariff from HUB Energy at £903.45 fixed for 12 months — £234 cheaper than the default cap.

Another challenger supplier, Utility Point, is the second cheapest on its Just Up 21 12M Fixed Wk09 deal.

Households will pay an average of £919.12 a year – and as an added bonus, it is also a green tariff.

Avro Energy has the third cheapest plan on its Simple and Super12M fixed deal, costing £920.26 a year. 

Eon is the only Big Six supplier with an offering on the best buy table with its Fix 1 Year Exclusive Spring 2021 deal. Consumers will pay an average of £984.49 a year.

All of the best fixed deals available are at least £149 cheaper than the Ofgem price cap limit.