Money Matters: Should I fix an energy deal before the October price cap rise?
In this week’s Money Matters column, Wrekin’s debt and energy manager Dan Bebbington sets out how the energy price cap is changing next month, and how you could save money on bills.
It’s nearly that time again – the latest energy price cap change.
In October, the price cap will go up by 10%, taking the annual energy costs for an average household from the current price cap level of £1,568 a year to £1,717. This will mean an increase of around £14 a month on your energy bills.
However this figure is just an indication of what a typical household with average energy usage might be paying, if they pay through direct debit on a dual fuel tariff (that means gas and electricity are paid for together).
The actual amount you pay is determined by your energy use, which will probably be higher if you have a larger home and/or have more people living with you. Those who use other payment methods, including pre-pay meters, also pay differing amounts.
Currently, most households will be on price-capped tariffs, as energy costs have soared over the last two and a half years which has seen a lack of deals offered by suppliers.
However, a few deals have now become available after the July price cap, which was the lowest since the start of the energy crisis.
Although we don’t know exactly what will happen to the price cap each quarter, it’s currently expected that there will be another slight rise in January 2025.
To protect yourself from the upcoming increase, it might be worth looking at what deals are available now.
It may still be worth fixing now even if it will mean your bills go up slightly from what you are currently paying.
Money saving expert Martin Lewis says if you can get a deal for 11% more than the current (July to September) price cap, you will probably save money over the course of the next year.
A number of suppliers including EDF, British Gas, Octopus and Ovo are currently offering deals within this range. Fixing will also give you certainty over what you’ll be paying, rather than waiting to see what the price cap does each quarter.
There are also deals available from E.On and EDF which give a commitment to staying below the price cap. These are not technically fixed deals as what you pay will change whenever the price cap does, but are still worth considering.
Before signing up to a new contract, make sure you read all the terms and conditions to ensure it’s the best deal for you and you know what you’re agreeing to.
For example, many deals require you to have smart meters installed if you haven’t already got them, while others come with caveats that you have to take up boiler cover or other products from the provider in order to access the deal.
You can go to moneysavingexpert.com for more information on current deals. Wrekin Housing Group customers who need help with their energy costs can contact our Money Matters team.
11th September 2024