The typical household that pays by direct debit will see their annual energy bill increase from £1,663 to £1,723 this October – with another rise in January also expected
Energy bills are expected to rise again in January(Image: Getty Images/iStockphoto)
Households are being to consider fixing their energy tariff as there are now only four deals available that beat the October price cap.
The Ofgem price cap is rising by 4% from October. This means the typical household that pays by direct debit will see their annual energy bill increase from £1,663 to £1,723.
Energy analysts at Cornwall Insight currently predict a further 9% jump in January, as the ongoing war in the Middle East continues to put pressure on wholesale fuel prices.
You are covered by the price cap if you are on a variable energy tariff, so if you are not fixed into a deal.
The latest analysis from MoneySuperMarket shows the cheapest energy tariffs now beat the October price cap by just £31 on average, down significantly from the beginning of the year.
This is because higher wholesale fuel prices are leading to suppliers repricing or withdrawing their cheapest tariffs.
Laura Hinton from MoneySuperMarket Energy said: “Locking in a fixed rate means you’re shielded from future price rises and gives you a clearer idea of what your energy costs will be for peace of mind and to make budgeting easier.
“We’ve already seen fixed tariffs become more expensive and the number of deals below the price cap shrink. The most competitive fixed deals can be withdrawn or repriced at short notice, so acting now could help households secure greater certainty over their bills this winter.”
Fixing your energy tariff locks in your gas and electricity unit rates and standing charges for a set period, normally one year.
The main advantage is that if energy prices rise in the future, you are protected from these increases – but if they fall, you pay more until your fixed rate ends.
Be aware that there is normally a fee for leaving your fix early, although you can leave without penalty during the last 49 days of an existing fixed contract. Ofgem will announce the price cap for January by November 25.
Households should be prepared to take a meter reading before the October price cap comes into force, so you are not charged at higher rates for energy used before the price cap changed.
If you have a smart meter, then you should not need to send a meter reading, as this should send regular readings to your supplier for you.
