Don’t be tempted by a fixed energy deal – they still don’t add up

As energy prices soar, it may be tempting to fix into a deal to ensure certainty against spiralling bills. This winter, the average household faces a monthly energy bill of as much as £ 500, so a fixed deal may start to make sense.

But according to comparison site Uswitch, there are no fixed deals cheaper than the current price cap predictions. The forecast for October’s price cap is lower than most fixed deals, so locking in now means that for most of winter you would be paying more than the price cap. Fixing now is gambling that the price cap will not come down later next year – and for however long the contract lasts.

Justina Miltienyte, of Uswitch, said: “It’s crucial that bill payers don’t feel pressured into taking out an expensive fixed tariff if they will struggle to manage the cost.

“The lowest-priced fixed tariffs are mostly only offered to existing customers of the given energy supplier, and are still priced above where the price cap is expected to go in October.”

Instead of focusing on the overall cost of the deal, which are usually fixed for a number of years, look at the price it is charging per unit. Then you can work out how much your average consumption is – in winter as well as currently – and see if it looks like it could be good value. Take a look at forecasts to understand if the proposed deal will protect you when prices soar.

You could also cancel your direct debits, which can be increased by your supplier to any amount without your approval. Instead, you could set up a standing order to pay per bill, so you can be in control. The downside of this is you would miss out on discounts applied for paying by direct debit.