In this recent article, we showed you how you can find the cheapest energy supplier and save hundreds of pounds a year. The question now on everyone’s lips is whether a fixed price energy tariff is a good idea.
In the last couple of weeks, nabbing the cheapest gas or electricity deal has become even more important. That’s because more energy price rises have been announced – and things look set to get even worse.
Scottish & Southern Energy has announced that it will be raising its non-fixed gas and electricity tariffs by an average of 9% on 15 October 2012. Around five million electricity customers, and over three million gas customers, will be hit by the hike.
And energy experts think this is likely to be the first of several price rises announced by utility companies this autumn and winter. In fact, the only firm that definitely won’t raise prices in the next few months is E.ON, because it has pledged not to raise prices during 2012.
So, it makes sense to do your research now, and try to lock your energy prices down while you still can.
If you choose a fixed price energy tariff, you’re effectively locking into a fixed price for a certain period of time. With a variable rate tariff, on the other hand, the price can be raised or lowered whenever your provider feels like it.
In certain circumstances, a variable rate tariff can make good financial sense. For example, if overall energy prices look likely to go down, a variable rate tariff will allow you to benefit from these falls when they happen.
However, with experts predicting more price hikes in the near future, a fixed price energy tariff could prove to be a (relatively) calm island in stormy seas.
And this is particularly important if you’re already operating on a tight household budget: It will give you the peace of mind of knowing what your energy bill will be several months in advance. This, in turn, should enable you to more easily budget for everything else.
If you do decide to switch suppliers, MyFamilyClub partner uSwitch can help you find the best deal.