Is It Time To Move Away From Fixed Energy Plans?
Published: 23 January 2012
By Peter Thompson Leave a Comment
Updated: 3 April 2012
As energy suppliers cut energy prices, those on fixed energy plans may be wondering if they now have the best deal. Is it time to move away from a fixed plan to an online energy plan?
According to uSwitch.com, even though energy prices have been cut, those on fixed energy plans are still fairing well.
Suppliers would have to cut their prices by a further £170 or 13.5% before consumers who fixed their prices last summer would be losing out against standard plan customers.
Even those who have fixed more recently are still better off – the average cost of a fixed price plan today is £1,149 a year which is £110 or 8.7% cheaper than the average standard plan even after the price cuts come into effect.
Interestingly fixed plans now account account for four out of the eight current energy best buys:
|First:Utility||iSave Dual Fuel V9||£1,030|
|Ovo Energy||New Energy fixed||£1,061|
|ScottishPower||Online Fixed Price Energy May 2013||£1,070|
|npower||Go Fix 10||£1,078|
|EDF Energy||Fix to March 2013||£1,080|
|British Gas||Online Energy||£1,142|
Today many of the energy suppliers have created a hybrid between fixed and online plans, allowing consumers to benefit from the competitive price of an online plan and the security and price guarantee of a fixed plan.
If prices on online plans do fall and they become noticeably cheaper than fixed price plans, you may want to cancel their fix and switch to a cheaper deal instead.
Before doing this you need to take into account any exit penalties. However, as part of their recent pricing announcements both npower and E.ON have decided to waive exit penalties for a period of time for their existing fixed price plan customers, leaving them free to move on if their fixed price deal becomes uncompetitive.
Tom Lyon, energy expert at uSwitch.com, comments: “The trickiest decision is for those who are weighing up between an online energy plan and a fixed price plan. There is currently only £29 between the most competitive online plan and the cheapest fixed price plan.
“But the fixed price plan will not benefit from price cuts while the online plan potentially could, although there are no guarantees.
“What the fixed price plan will do though is to protect you against price rises in the medium to long-term so consumers need to consider how important this price security is to them before signing on the dotted line.”
MoneyHighStreet comments: “With so much emphasis on the need to save money at the moment, the opportunity to do this on energy bills is of course attractive. However, many also want to be able to budget and know for a period of time what their expenses are.
Hence, as Tom comments, there are advantages of a fixed price plan to consider even if the price, at least in the short term, is slightly higher.
Perhaps it’s also a good time to look at your sloppy energy habits? With many of us needlessly wasting money by leaving electrical items such as TV’s, set top boxes and games consoles on standby, just by turning them off we can save money on our energy bills. It might seem a pain to do but it’s worth doing!