The Daily Observer London Desk: Reporter- Victoria Smith
Households are stuck on expensive energy deals and unable to save money by moving away – as just one fixed rate tariff out of 11 on the market works out cheaper than the Ofgem price cap.
Even then, the cheaper deal – from Utility Warehouse – has strings attached, as consumers will need to take out other utility bills through the firm to get the best rate.
At the moment, most homes in the UK are paying energy bills limited by the price cap set by regulator Ofgem.
The price cap is an average of £1,834 a year from October 1 to December 31, and applies to households on variable-rate energy tariffs paying by direct debit.
Energy headache: Consumers have to work out unit rates and standing charges to find if a deal is cheaper for them – and even then it means taking a gamble on the future of energy prices
Consumers are crying out for the return of cheaper fixed rate energy deals, but research from Future Energy Associates found these are in short supply.
There are only 11 fixed rate energy deals on the market for new and existing customers, of which only one works out cheaper than a current price-capped deal.
Future Energy Associates also found there are an astonishing 337 pre-existing fixed rate energy deals costing consumers more than they would pay on a variable-rate tariff – and many have expensive exit fees if customers want to leave.
The cheapest fixed rate deal is the Utility Warehouse Fixed Saver 7, which is £1,775 until November 2024 – £59 a year cheaper than the average home pays on a price-capped tariff.
However, that rate is only available if customers add two other utility bills to the package alongside the energy deal.
Fiona Waters, spokesperson for the Warm This Winter charity group, said: ‘Anyone trying to find savings in the energy market is on a hiding to nothing. Even if you can navigate the complicated and confusing array of tariffs, there’s barely anything in the way of real deals.
‘We have found only one fixed tariff that is less than the price cap, and that comes with strings attached as you have to bundle other utility bills in it to be eligible. The government and energy industry seems to think that Britain’s broken energy system is fixed, but households trying to find an affordable deal to get them through this winter know otherwise.’
