As July and August draw nearer we can all look forward to the warmer weather. The chances are you’ve already switched off your central heating for the summer, so energy bills may not be your highest priority. But in actual fact, now’s the perfect time to plan for the future.
Last year we witnessed the major UK energy suppliers increase their prices once again. As a result there was fierce debate in Parliament, with Labour leader Ed Miliband keen to take action and prevent further price hikes.
By why wait around for someone to solve your problems? Instead you could fix your energy prices and avoid an increase for the foreseeable future. But is this the right way to go about things?
Towards the back end of 2013, the major energy suppliers pushed up prices as follows:
- Npower: 10.4%
- British Gas: 9.2%
- Scottish Power: 8.6%
- SSE: 8.2%
And even worse news is that we can expect more increases before the year is out. The average annual dual fuel energy bill is now over £1,400, with many homeowners feeling their purse strings tightening.
What many people can’t understand is why energy prices are constantly on the rise. The companies put the blame on wholesale energy costs, but collectively the big six made a profit of £3.74bn in 2012.
Energy expert Jeremy Cryer said: “If you are more comfortable knowing exactly what your monthly commitments are, it may be beneficial for you to think about fixing before all the good deals and tariffs start disappearing from the market – which they have been in recent weeks.
“But fixing energy bills can be a gamble for consumers. It’s fine when the market is volatile and prices are going up and down, but not such a good idea when prices are stable, as you pay a premium to fix.”
Funnily enough, just days after Ed Miliband made the pledge of energy prices freezing, three of the big six said they could offer fixed tariffs until 2017.
So what is a fixed energy tariff?
By taking advantage of a fixed energy tariff you can control the price paid for gas and electricity for a set period. This is normally between 18 months and two years.
So over this period your energy rates won’t change. You won’t be affected by any rise. But on the downside, if there is any drop in price you won’t benefit either.
What happens after this period?
When your fixed tariff rate comes to an end the energy supplier will automatically move you onto a standard tariff, which is the most expensive. At this stage it’s best to compare prices between a number of suppliers to make sure you find the best deal.
Should I act quickly?
In a word, yes. If you see a great deal then snap it up quickly because the offer can be pulled at any moment, leaving you out.
How else can I reduce energy bills?
As well as considering your energy tariff and provider, there are some great tips for reducing your overall energy usage too.
We suggest:
- Use renewable energy to produce your own power rather than relying on the grid
- Switching to energy saving light bulbs
- Turning the thermostat down. Just a single degree can save you as much as £65 annually
- Ensure the draughts in your home are eliminated
- Consider putting on an extra jumper rather than turning up the heat
- Close all doors to lock heat inside the room.
Facts & Figures You’ll Love To Share
- [tweetable alt=””]With fixed energy prices you’ll keep costs the same for a set period, usually between 18 months and two years.[/tweetable]
- [tweetable alt=””]Variable energy tariffs mean your costs change with the fluctuation of National Grid prices.[/tweetable]
- [tweetable alt=””]With a fixed tariff you’ll protect your expenses but won’t benefit from a dip in national prices.[/tweetable]
- [tweetable alt=””]Electricity usage in the home has increased 2% annually over the last 50 years.[/tweetable]