Good time to change providers?
It’s no new rhetoric, energy prices seem to always be on the rise. This summer has been no exception, with this month seeing further increases.
Now Ofgem, the nation’s energy regulator, has announced that a draft to cap energy prices is now being formulated.
What this means for consumers is still uncertain, but the cap could mean a significant reduction to the currently volatile energy market prices.
So what will this mean for those on variable energy plans? Will it still be the wisest choice to take a fixed rate?
Will fixed rates soon become a shackle, rather than the sensible, consistent approach they are marketed as?
Reasons for energy price hikes
It’s no secret, every household in the country is using more electricity than ever seen on record.
This does mean that there has been a notable reduction in gas use, as more homes opt for all-electrical heating and cooking appliances, but renewables don’t seem to be having a significant enough effect on the rise in energy costs.
There are, unfortunately, moves like the one by British Gas in April, that was quoted as “unjustified” Claire Perry, energy minister.
Energy providers nationwide have blamed the rise on “wholesale costs”.
Which customers were hit the hardest?
Customers who stayed on standard variable tariffs (SVTs) were the ones in the firing line, and although the number of customers on SVTs has dropped, the figure is still in its hundreds of thousands.
Fixed rate tariffs have looked like the only protection for customers against price fluctuation, but now it looks like a cap will be being introduced in September.
What advice is there for customers?
The best advice so far is to change your energy tariff to a fixed rate to protect yourself.
It is also typically advised to regularly change your provider, and compare energy tariffs with your needs as time progresses.
By switching to a fixed rate tariff for your energy, you can shed as much as £400 from your yearly energy bill.
If your home has electric and gas bills, consider the dual fuel tariffs available, many energy providers provide discounts for a single bill.
Why has it taken so long to cap energy prices?
This is a good question, as conversations about energy price hikes have been around since October of last year.
This, however, is actually a faster turnaround than originally predicted. When the announcement was made at the Conservative Conference Speech last year, predictions actually stated early 2019.
Instead of early 2019 it is now early September 2018, and although the official cap won’t be in place then, it is still promised to be in place by the end of 2018.
Don’t put off changing your energy tariff. With the cap within months of coming into place, it’s likely that you are going to get your best deal by taking advantage of the coming months.
Once you’ve found a tariff, make sure you shop around regularly and ensure you’re on the best deal.