To fix or not to fix - that is the question

With the daunting prospect of further energy price hikes this year, some Brits may wish to take a gamble to fix now and be quids in later. However, price comparison website moneysupermarket.com, urges people to consider their actions carefully, as making the wrong move could prove costly.

‘Fixed' and ‘capped' tariffs offer customers the financial security of knowing their energy costs will not rise above a set level. Four of the big six UK utility providers offer these tariffs, with the latest offerings from British Gas Price Guarantee December 2009 tariff available from 1st June and Scottish Power Fixed Price 2009 tariffs available from 4th June.

At £1071 a year, British Gas Price Guarantee December 2009 is more than £200 more expensive than the cheapest online dual fuel tariff from British Gas, Click Energy 5 at £845.

Scott Byrom, utilities manager at moneysupermarket.com said: "Fixing your energy tariff, could be an excellent option for those looking to protect their payments against future price hikes. However, there will be a premium to pay for this peace of mind

"Brits looking to stay on the cheapest deal available should consider dual fuel online products. We have already seen rises of 15 per cent this year; customers should note that it would only take a 20 per cent increase in energy prices by the end of next year for the cheapest online dual fuel deal to become more expensive than the fixed options currently available."

Bill payers should be aware that fixed price tariffs may charge a termination fee and, as the table above shows, this can be as much as £75.

Scott Byrom continued: "The termination fee from British Gas Price Guarantee 2009 looks to have set a precedent with other providers now introducing similar high fees to their fixed tariffs. Brits looking to fix need to be comfortable with being tied to the tariff and the provider for the set period, otherwise they may face a cancellation fee.

"Customers attracted to a fixed price tariff should swap sooner rather than later - if other providers jump on the fixed deal band wagon the chances are they will not offer tariffs as favourable as those already on the market. Fixed products also look set to have limited availability so it's a case of first-come, first-served.

"Ultimately I urge people to keep abreast of the deals on the market and ensure they are on the best tariff for their usage, region and circumstances."