Why there's still time to fix
British Gas today announced 6% price rises to hit on 16 November, while SSE will hike prices by 9% next Monday. There’s still time to beat these by locking in cheaper prices with no jumps guaranteed for two years (see the Cheap Gas & Electricity guide for how).
The solution is all about switching to a cheap fixed rate tariff – that means the rate you pay is sealed for up to two years.
I’ve been calling very loudly for people to do this ever since SSE announced its hikes back in August (and was suggesting it even before then, just without quite the volume).
Back then, you’ll see my point was "do this urgently". The reason for that is two firms, EDF and Scottish Power, were offering super-cheap fixes with the holy grail of no early exit penalties. That meant even if prices did unexpectedly drop in future, you could leave and go elsewhere.
As predicted, those tariffs have long departed. Both have been replaced by similarly-named, but more expensive deals – and I’m still suggesting many people consider fixing to beat price hikes.
Was it so urgent before? The key here is this is all about the price you lock in at – and the reason for that urgency was all about the price.
Prices when SSE announced hikes (22 August)
- Average standard tariff: £1,310
- Cheapest fix, no exit penalties: £1,050
- Cheapest fix, with exit penalties: £1,040
The lie of the land now
- Average standard tariff: £1,310 (likely to be about £1,380 after all hikes)
- Cheapest fix, no exit penalties: £1,140
- Cheapest fix, with exit penalties: £1,090
Based on Ofgem’s typical usage stats.
As you can see, it’s still very much worth many on standard tariffs who haven’t fixed considering doing so.
They will still save hundreds of pounds and lock in no price rises (again, full info in the Cheap Gas & Elec guide).
However, the price you’ll pay by fixing now is substantially higher than for those who grabbed the opportunity earlier.
This is especially true of the no exit penalty fixes, which are the holy grail of fixing. They’ve gone up a huge amount.
Plus, there’s also been a subtle change in the language I’m using. Previously, I was saying everyone should consider fixing (even then, that wasn’t to mean everyone should do it, just to check if it was right for them).
My rhetoric now is very much about those on standard tariffs considering fixing. That’s because previously, many even on relatively cheap deals could ditch, fix and save.
Now for many more of those, they’ll do a comparison and discover they would have to pay more to fix, resulting in a much more difficult decision. (Do a comparison to see.)
So in a nutshell, my prior urgency was about getting the very best deal – we knew they wouldn’t last long – but for many, it’s still worth acting now, though the subsequent saving is smaller than it would have been.
