Energy switchers missing out on fixes

Energy firms are cutting back on fixed fuel deals with just 15 per cent of offers now allowing customers to cap their energy costs, according to research from MoneyExpert.com.

Only four firms - British Gas, ScottishPower, E.ON and EDF - currently offer capped deals which guarantee prices won't rise beyond a certain level. In total they offer nine different deals out of a total of around 60 tariffs on the market.

But MoneyExpert.com, which runs leading energy switching service SimplySwitch.com, is concerned that watchdog rules are steering customers away from choosing capped deals.

It is urging customers to review their energy deals now that all major power suppliers have implemented hefty price rises and estimates households can still save up to £340.

Watchdog EnergyWatch insists price comparison services have to compare all deals against each with the result that currently capped tariffs are not listed as among the most competitive. A typical search for a £1,000-a-year dual fuel bill household shows the best capped deal as E.ON's 2009 fixed deal at 17th.

Inevitably this means many customers ignore capped deals purely on the price comparison despite the risk that further energy price rises could be implemented in January 2009.

Sean Gardner, director of MoneyExpert.com, said: "EnergyWatch quite rightly insists switching services have to compare all deals on the market in their best buy tables but that runs the risk of not explaining exactly what is a best buy. Different people have different needs.

"The lowest price is not always the best advice as many customers may not be aware that they can cap their energy bills and would benefit from being able to do so. Anyone whose household budget is stretched or who wants the security of knowing what they are paying would often be better off with a capped tariff.

"Customers should focus on more than just the price shown in best buy tables. Price comparison services do the best they can under current rules but the rules could be clearer."

All the major power suppliers have implemented price rises with increases on gas bills of as much as 35 per cent and on electricity of as much as 19.2 per cent. However the tariff that is shown at the top of best buy tables British Gas's Click Energy V5 has yet to be increased although a rise is expected within the next months.

Customers who opt for capped deals will pay more than some variable tariffs now but will be protected from any future price for as long as three years with some deals. They can switch out of capped deals if they change their mind although will have to pay exit fees of between £50 and £100.