Is it time to fix your energy tariffs? Experts have weighed in as the Ofgem price cap is set to go up again from January 1

Energy experts issue fixing advice as Ofgem puts up price cap again from January

by · Birmingham Live

Energy experts have offered advice on whether to fix gas and electricity tariffs after Ofgem announced it will raise the price cap again in January. A 1.2 per cent increase will see the typical bill for a household in England, Scotland and Wales go up from £1,717 to £1,738 a year, or by around £1.75 a month.

It's important to note that the cap does not limit total bills, because householders still pay for the amount of energy they consume. The new increase comes on top of a 10 per cent rise in the cap in October.

And while the latest price cap is 10 per cent or £190 lower than a year earlier, and 57.2 per cent or £2,321 less than during the energy crisis triggered by Russia's invasion of Ukraine in February 2022, it comes as millions of pensioners are facing a winter with less support after the new Government decided to scrap Winter Fuel Payments for those who do not receive Pension Credit or other means-tested benefits. About 10 million pensioners will no longer receive a payment of up to £300 this year.

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Tim Jarvis, director general of markets at Ofgem, said: "While today's change means the cap has remained relatively stable, we understand that the cost of energy remains a challenge for too many households. However, with more tariffs coming into the market, there are ways for customers to bring their bill down so please shop around and look at all the options.

"Our reliance on volatile international markets – which are affected by factors such as events in Russia and the Middle East – means the cost of energy will continue to fluctuate. So it's more important than ever to stay focused on building a renewable, home-grown energy system to bring costs down and give households stability.

"In the short-term though, anyone struggling with bills should speak to their supplier to make sure they’re getting the help they need and look around to make sure they're on the best, most affordable deal for them."

James Longley, managing director at Utility Bidder, said: "This announcement will have caused financial anxiety amongst thousands of people across the UK and left them with many energy-related questions. One of the biggest decisions people often have to make when it comes to energy tariffs is whether they should fix it or not.

"So, should you stick with the price cap rate, and when is the best time to fix your energy? In 2024, more than 90 per cent of UK homes pay the standard tariff and the full price cap. Fixed rates, however, help give customers peace of mind and provide lots of choice in terms of start and end dates; this is coupled with exit fees and the lost benefit of falling energy prices when you are already under contract.

"Of the major energy companies offering fixed rate deals as of autumn 2024, the majority will offer fixed deals to existing customers, with a large majority offering incentives to new customers as well – though some prove more complicated than others. It would be recommended that you look at comparison sites to find the best deals for fixing your energy, and this should be only considered if you are locking in the cheapest rate.

"Whatever your next cause of action, electricity and gas users should try, where possible, to limit their usage during peak hours of the day. Using any utilities throughout the night will prove cheaper, and you can set timers for appliances such as dishwashers. Other lifestyle changes which you will reap the benefits of include minimal tweaks such as switching your appliances off when you’re not using them, rather than leaving them on standby, or more long-term solutions include removing your gas boiler or installing solar panels."

Utility Bidder's research has found that the highest annual electricity bills are in the Merseyside/North Wales region, where people pay around £1,353 for electricity each year. When combined with gas costs, the total in this part of the UK rises to £2,586. Here in the West Midlands, we are placed 10th, with electricity costs of £1,279 a year.

Meanwhile, South Scotland pays the most for gas at £1,245 a year which, when combined with electricity costs, totals £2,556. The West Midlands and North East come next with average gas bills of £1,240 a year.

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