Households are urged to check if they can reduce their energy bill by taking on a “no-risk” fixed-rate tariff. The energy price cap – the limit providers can charge per kWh – is set to rise by 6.4% on April 1, raising bills for thousands of households still on a variable tariff.
However, there is a way to beat the price rise, according to Martin Lewis’s Money Saving Expert (MSE) team, and that’s through switching to a fixed rate deal. The team wrote in their latest newsletter of tips: “The Energy Price Cap, which two-thirds of homes in England, Scotland and Wales are on, moves every three months – and we know it’ll rise 6.4% in April. As the current cheapest fixes are 7% below today’s Price Cap, they’re massively cheaper than April’s price.”
Fixed deals protect consumers from price hikes by locking in rates for twelve months or more. However, some households have been hesitant to sign up, fearing they could miss out on falling wholesale energy prices. Typically, leaving a fixed-rate tariff before the contract ends comes with an exit fee per fuel.
However, there is an option to opt into a fixed-rate deal with no risk of paying more or incurring exit fees. Energy giant EDF is currently offering a deal with no exit fees, priced 4.8% below the current cap and 10.5% lower than April’s rates. If prices drop during the contract, households can exit the tariff penalty-free.
MSE wrote: “Analysts’ current predictions are the Cap will remain materially higher for the next 12 months. Yet, if there’s peace in Ukraine, prices could plummet. Some have said they’re not fixing due to this. If so, consider the no-risk fix.
“You’re always free to ditch a fix, though you sometimes need to pay early exit fees of £25 to £75 per fuel. Yet this cheap EDF no exit fee ‘Simply Fixed Direct’ tariff is 4.8% below the current Cap (10.5% below April’s), and if prices do fall, you can leave penalty-free whenever.”
Ben Gallizzi, energy expert at Uswitch.com, also emphasised the benefits of opting for a fixed rate during the current period of volatile prices.
He said: “Now is the time to take action to avoid the energy price hikes in April. If you haven’t switched in over a year, you’re likely on a standard tariff and could be paying more than you need to.
“Running a quick comparison on Uswitch.com could help you find a better deal in minutes.”
