What’s in this guide?
Did you know you could be saving £200 by switching from a standard variable tariff to a fixed rate tariff?
That means depending on who you decide to switch to; you could save hundreds of pounds a year so that you don’t have to worry about increasing energy costs.
Let’s take a closer look at fixed rate tariffs, including what they are, where you can find the best deals and how you can switch.
Read on and find out more.
What are the fixed price tariffs?
A variable rate tariff means that the cost of your energy increases and decreases with the open market.
A fixed rate means that the price of your energy is set for a certain amount of time and it won’t change.
Variable tariffs tend to be far more expensive in general.
This is because energy prices are steadily increasing, with energy companies such as British Gas having increased their standard variable tariff several times this year alone.
Fixed rate tariffs, on the other hand, could save you £100s every year on average.
Your energy supplier essentially promises via a contract not to change your energy costs that could, for example, be for one year or perhaps 2.
Sometimes it can be slightly confusing because a fixed rate tariff for two years may be more expensive than for only one year, however with your costs being set for longer, you could avoid some severe price increases.
It comes down to what you think is best for you and your home, so let’s take a look at the pros and cons of fixed-rate tariffs.
Fixed rate tariff pros
✔ Avoid any nasty unexpected bills
✔ Budget easier as you’ll know your costs
✔ Protect yourself from price increases
✔ Cheaper than standard variable tariffs
✔ Save £100s a year
✔ Smaller providers could be less expensive than the big six
✔ Compare and save even more
Fixed rate tariff cons
✗ Fixed rate tariffs usually have exit fees
✗ You wouldn’t benefit from price cuts
It is clear that the benefits of fixed tariffs outweigh the negatives, especially as now that the market is getting even more competitive, suppliers are continually trying to come up with ways to become more appealing to customers.
This is thanks to increased competition, with smaller suppliers often beating the ‘big six’ in value for money, bill clarity and customer satisfaction.
In fact, in the Which? Energy Survey 2018, none of the big six made it to the top 10 energy suppliers!
When does my contract end?
Thanks to Ofgem, the industry regulator, energy suppliers now have to give you a notice period of 49 days before your contract ends.
This is so you can either renew your contract with your current supplier or take a look at the market and see what else is on offer.
Thankfully, it means that you will have a chance to make a move before your supplier rolls you onto their standard variable tariff – which is often far more expensive.
Many customers lose out on £100s in savings every year by not switching to a fixed rate contract, which is why there has been more advertising by Ofgem and price comparison sites to encourage you to switch.
Up to 60% of customers have never switched energy suppliers because they think it’s going to be too much of a hassle.
However, this couldn’t be further from the truth.
Now, customers have to choose which supplier to switch to; then your new supplier will take care of every part of your switch for you.
The only thing you have to do is provide a meter reading to your previous and future supplier at a time that your new energy company will tell you.
So why compare? Let’s take a look.
Because every supplier is unique in at least one way, whether it’s how their customer service rates or the services that they offer.
The ‘big six’ energy companies are enormous and reliable, with millions of customers.
This attracts many customers, but on the other hand, their ratings on trusted websites such as Trustpilot tends to be more harmful than their independent competitors.
Smaller independent energy companies generally tend to offer competitive pricing and excellent customer service, but they do run more of a risk of going out of business.
This leaves a difficult choice for many customers, but there is a decent solution.
When you compare, you can place these companies next to each other and see how they match up regarding not only price but also customer satisfaction.
How do I compare?
Once you have decided that comparing energy suppliers would be an excellent choice for you, how do you get started?
First, you need to decide what you want from your suppliers, like communication and price.
Second, you need to have some information like your postcode, your annual consumption or house size and details like your email or phone number.
Third, compare which is when you use a comparison tool that will give you every deal available to you within minutes, saving you a lot of time and effort.
Are you interested comparing or switching energy supplier?
Did you know that you could be saving up to £500 on your energy bills every year?