New Energy Prices - Best Deals
- BetterAskAdam.com
- Feb 25, 2024
- 4 min read
ENERGY PRICES FALLING, BUT THERE IS A ....BUT
The price of gas and electricity will fall by 12% on average from 1 April after energy regulator, Ofgem, announced a fall in the maximum level of the Energy Price Cap. This is the maximum energy companies can charge and since they all tend to charge the maximum, this generally works out to be the rate we actually pay.,
The BUT is that while this is great news for many people, energy bills remain much higher than before the energy crisis hit
The average gas and electricity bill will fall by £238 to £1,690 this spring. But in the winter of 2020/21 the average cost was a little over £1,000 - so it is still massively higher than that.
No one knows for sure of course, but the prediction is that the price cap will fall again. when it is next reviewed. The Price Cap is revised every three months.
Good News But Still Worries For Many
The Chief Executive of National Energy Action (NEA), Adam Scorer, says:
“This is, of course, good news [but]...For two and a half years, household budgets have been stretched beyond breaking point by high energy bills. Households in fuel poverty, on negative budgets and in impossible debt will see no chink of light this morning. The cost gap between where they are right now and escaping fuel poverty is getting wider. Whatever relief might be felt by this news, years of punishingly high energy bills will continue to take a heavy toll.
Stubbornly high prices are here for the foreseeable future – the government cannot simply ignore this as the new normal. We need a social tariff to provide permanent, deep protection for low-income households, we need action on debt to bring households out of this spiral, and we need long-term, significant investment in energy efficiency to make sure households are resilient against energy crises.”
The Unfairness of Standing Charges & How They Are Changing
Those on limited budgets often have pre-payment meters. What seemed terribly unfair, is that the standing charge for those people least able to afford high costs, were actually higher than those who paid their bills by direct debit.
This has now been changed so that standing charges are the same for pre-payment and direct debit customers.
Standing charges will rise from £303 to £334 a year, even if you turn off all your power.
Better Deals May Be Around The Corner
For a while, it has been really hard to find a great deal, as they all seemed very like each other. But this might be about to change.
That's because competition was hampered by something called the Market Stabilisation Charge' It sounds boring but seemed to me to limit competition. That's because a company that won a new customer by offering a cheap deal, had to compensate the old company you moved from. As a result it wasn't worth a lot of companies offering great switching deals, and reduced the ability of consumers to shop around and make savings.
This is about to change, as from April 2024, Ofgem is suspending the Market Stabilisation Charge which might open the door for a lot more deals.
Some Deals Which Caught My Eye
The market could be very fluid over the next month or two - so it is worth keeping an eye out on the best buy tables and comparison sites, but here are a few which caught my eye.
The E.on Next Pledge is about 3% less than the Price Cap for the first year. Although to get it, you need to be on Direct Debit and have or get a smart meter.
The Octopus Tracker tariff could be good although the price could be volatile. That's because it's prices change daily, tracking the cost it faces in the wholesale market. It's only available to existing Octopus customers. Customers would have saved quite a bit compared to being on a Standard Cap rate.
Outfox the Market has dual-fuel deal which is about 3% less than the current Price Cap. It has also got a 12-month dual-fuel fixed tariff, which works out 14% less than the current Price Cap.
But keep an eye out - there might be a lot of movement on this.
Watch Out For Exit Fees on any deal!
Should I Fix?
As I have said on the fix issue on this and other deals, much of the decision is not about the actual cash, but how much you can cope and can afford with uncertainty.
The British Gas Price Promise is about 12% below the current Price Cap, and on April 1st it will drop to £1,688 a year for a typical dual-fuel user, fixed until June 2025. That is about what the typical variable rate deal will charge from 1st April. So it might turn out to be the best deal around over the next year - but it buys you certainty in an uncertain world.
Do have a look at the comparison sites for the latest deals as they change almost daily.
