End of fixed price deals could cause £100 energy cost shock

Price increases of 42% or £381 in 2008 sent British consumers scrambling to secure a fixed or capped price energy deal. But with millions of customers due to come to the end of their fixed deal between now and the end of the year, uSwitch.com warns that people should be extra vigilant to prevent their energy costs rocketing.

The average annual energy bill could shoot up by £100 for those coming off of a fixed or capped plan, if they move back onto a standard tariff. The average fixed or capped energy deal taken out in July last year costs £1,045 per year. However the average standard plan currently costs £1,145 a year. 4.6 million UK households are currently on fixed or capped energy plans.

Suppliers are expected to be contacting householders on fixed or capped plans that are due to end. But with energy prices already falling and further price cuts expected during 2009 households need to make sure they are benefiting from the best price available now, with the ability to also benefit from any future falls in energy costs. Switching straight onto another fixed or capped deal may not be the best option and consumers are being advised to shop around instead.

Online energy plans currently offer the best value for money, with the cheapest online plan £225 cheaper than the average standard plan, and £27 cheaper than the average fixed price plan taken out in July 2008. If households do their homework they could actually come out of a fixed deal and see their energy costs fall. But, if they don't, they could be facing a £100 price hike instead.

Will Marples, energy expert at uSwitch.com, says: "Without a doubt, those who fixed their energy prices last year, avoiding the price hikes that hit other households, have done really well. However, with their price protection coming to and end they could face a bill shock if they don't start looking around for their next deal. They cannot afford to just move onto a standard plan or accept a new fixed or capped deal from their supplier without doing their homework first.

"Online energy plans are currently offering consumers the lowest prices, but just 5% - 1.3 million households - are signed up to one. I would urge anyone coming off a fixed plan in the near future to follow three simple steps to make sure they are getting a good deal: move to dual fuel, pay by direct debit and sign up to an online plan.

"Those who are tempted to fix again need to be aware that most fixed or capped plans now carry an exit fee if you leave before the fixed or capped period finishes - consumers should always check the small print carefully and ensure that an energy plan meets their needs before signing on the dotted line. Fixed plans are definitely right for some consumers, but in a time of potentially falling prices they could be the wrong move for many more."