Could fixing your energy bills be the answer to price rises?

shocked-bill
Steve got a shock when he opened his energy bill yesterday
"A good signal for when it's best to fix is when good deals and good tariffs start disappearing from the market - which they have been in recent weeks" Jeremy Cryer, Gocompare.com
  • | by Emily Bater

As the nights draw in and a chill fills the air, you're probably giving a lot of thought to the cost of your energy.

Today Scottish Power announced a 8.6% price rise in the cost of duel fuel, the latest of the big six to pass price hikes on to customers. Scottish Power is the fourth to fall, swiftly following Npower's rise of 10.4% earlier this week.

British Gas' rise of 9.2% overshadowed SSE's rise of 8.2% - EDF and E.On will no doubt soon follow.

Back in September, Labour leader Ed Miliband promised to freeze gas and electricity prices if he's elected in 2015 and since then energy hasn't left the headlines. But many canny householders are looking at fixing their energy prices now, with a fixed price tariff. Why wait for Ed? As Chris Martin would say, maybe it's time to fix your energy.

Last week homeowners woke up to the news that SSE would be hiking up its gas and electricity prices by a painful 8.2%, adding over £100 to the average SSE customer's annual fuel bill. SSE almost certainly won't be the last energy company to raise prices - hikes are expected from all of the big six.

Higher prices are due to come into effect from 15 November, just as we turn up our thermostats and dig out the heated blankets. Energy companies are citing the fact that they have to invest in renewable power for the hike, and so have to pass on their larger outgoings to the general public. This is despite the fact that the big six made around £3.74bn profit in 2012.

Gocompare.com's 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."

Days after Miliband's announcement, three of the big six offered fixed-price energy tariffs - Npower, Scottish Power and EDF all said they can offer fixed tariffs until 2017.

What is a fixed energy tariff?

Fixed-price energy tariffs set the rate your pay for your gas and electricity for a certain period - usually 18 months to two years.

During this time your energy bills won't increase, but you won't benefit from any fall in prices either. If you like consistency in your bills and no nasty surprises, a fixed tariff could be the answer.

Fixed rates often apply to the price of energy per unit plus the standing charge (the amount you pay to the supplier for providing you with your energy).

Some fixed rates only apply to the price per unit, though, meaning that if the standing charge goes up, your bill will go up, too, so be cautious.

If you fix your tariff now for 18 months, that will take you to mid-2015 - just when Ed could come into office.

What happens when the fixed tariff ends?

Once your fixed-price tariff ends, most companies will automatically move you back onto a standard tariff - the most expensive. Make a note to compare energy providers when your fixed deal ends in order to find the best deal for you.

Why you should move fast

Companies often offer cheap fixed price deals, but you need to snap them up quickly as they can be pulled at any minute.

You better think... About your energy consumption

What else can you do to save money on your energy?

Well, here are a few pointers:

  • The first rule of energy saving - close the doors
  • Switch to energy-saving light bulbs - they give a cosy, half-in-the-dark glow, perfect for bumping into things
  • Tumble dryers are notoriously expensive, so save by air-drying clothes instead
  • Draught-proof windows and doors - remember those snake-shaped draught excluders your gran used to have?
  • It sounds obvious, but wearing an extra layer or two really helps - plus you can look like your favourite woodland creature
  • Get the kids involved - if you have easily stimulated children you could even turn energy saving into a game...