Save Up to £173 a Year on Energy Bills by Switching to Fixed Tariff

Households in Great Britain could save up to £173 a year by switching to a fixed energy deal as the October price cap increase looms and further rises are expected in January. The energy regulator Ofgem has highlighted the potential savings, stating that fixed tariffs are available at over £100 below the new October cap rate.

The typical annual energy bill for 22 million households on default tariffs will rise by 4% from October 1, reaching £1,723 based on average gas and electricity usage. This follows a 13% increase at the start of July. The October rise coincides with the colder months, when heating demand typically increases. Ofgem noted that switching to a fixed tariff could shield households from these price hikes and the anticipated January increase.

Approximately 11 million homes, or 35% of all households, are already on fixed tariffs and will be unaffected by the October price cap rise until their current deals expire. Price comparison websites such as Uswitch and Confused.com have identified several fixed energy deals that undercut the October cap figure. For instance, Fuse Energy offers a 14-month fixed tariff priced at £1,550 per year for a typical-usage home, which is £173 below the October cap and £113 below the current cap. Similar deals are available from other suppliers including Co-op Energy, Octopus Energy, E.ON Next, and Ecotricity, with some offering savings of over £100 annually compared to the October cap.

Analysts at Cornwall Insight predict that energy bills may climb by a further 9% in January, potentially raising the typical household bill to about £1,872 per year. This forecast adds urgency to the advice to consider fixed tariffs. However, Cornwall Insight’s January 2027 cap figure will not be finalized until November, leaving some uncertainty.

Before switching, consumers should verify their contract’s remaining duration and any exit fees, according to Gareth Kloet of Go.Compare. Additionally, households can benefit from a temporary VAT cut on domestic electricity, reducing the tax from 5% to zero between October 1, 2024, and March 31, 2027. This change will save typical households £45 per year and applies to both fixed tariffs and price cap-linked bills.

Ofgem also notes that some suppliers offer cheaper electricity rates for smart meter users during off-peak times. Reducing energy consumption remains a key strategy for managing bills, and households should explore available support schemes, such as the Warm Home Discount, which offers a £150 discount and reopens in October.

#EnergySavings #FixedTariffs #Ofgem #GreatBritain #EnergyBills #PriceCap #HouseholdTips