British Gas has announced the launch of a new fixed energy tariff, offering customers savings on the new upcoming energy price cap. Energy bills will rise by 2% between October 1 and December 31 for households on variable tariffs when the cap rises again, pushing costs up for the millions of Brits who haven’t fixed their rates.
Households have been urged to check if they can benefit from a fixed rate tariff, as unpredictable and volatile wholesale gas prices could see bills jump further into the new year. British Gas’s new tariff claims to be “£168 cheaper” than Ofgem’s October price cap, and the deal is open to both new and existing customers.
The tariff, ‘Cheapest Energy Tariff,’ is fixed for 13 months and is part of a limited-time offer that ends at 10pm tonight (Wednesday, September 17). Those who want to leave the contract early must pay a charge of £50 per fuel.
Other providers are also offering customers sizeable savings on October’s price cap. Data from comparison site Uswitch showed that some deals on the market are currently as much as £237 cheaper.
Elise Melville, energy expert at Uswitch.com, said: “Now is a great time to lock in savings ahead of the price cap increase in October. Households could save around £237 against the upcoming cap by switching to the cheapest fixed deal.
“There are a number of competitive fixed deals available right now from both large and small energy suppliers.
“If you haven’t switched in a year or more, run a comparison as soon as possible. Households with the option to switch could almost always save by moving to a fixed deal.”
The energy price cap is updated quarterly and limits the amount suppliers can charge per unit of energy. It does not cap total bills, as charges are based on actual usage.
After October’s 2% increase, average energy bills for a typical dual-fuel household on a variable tariff will rise to around £1,755 per year.
The latest figures show more than a third of energy customers (37%) are now on fixed tariffs, which means they are protected from October’s rise.
However, Uswitch data showed that some 41 fixed deals from a variety of large and small suppliers are set to finish by the end of October. Unless they take action, consumers automatically roll onto their provider’s standard variable tariffs, which are some of the most expensive on the market.
Will Owen, energy expert at Uswitch.com, said: “Households who signed up for a 12-month fix last autumn, or a 24-month deal in October 2023, should check when their switching window opens.”
Sharing a “little-known hack”, Mr Owen said households on fixed deals are free to switch 49 days before the tariff ends without paying any exit fees.
He added: “If you’re on a standard tariff, now is the time to protect yourself from the upcoming price rise. Run a comparison to see what deals are available to you and how much you could save. Fixing your energy tariff to cheaper rates should be a no-brainer for all households who are able to do so.”
