With winter only slowly beginning to recede with the arrival of spring, British homeowners are hit with another expense: soaring energy costs. Ofgem has announced that an increase in the energy price cap will be introduced in April, homeowners are starting to question how they will survive under another economic squeeze. Under these conditions, fixing your energy rate could be the right thing to do.
The energy regulator Ofgem is set to announce its new price cap, which will leave millions of consumers in England, Wales, and Scotland facing increased gas and electricity prices. The upcoming increase, estimated at 5%, follows two other rises and adds to the already tight household finances.
For benefit claimants, the threat of rising energy bills can be especially frightening. But perhaps there is a silver lining in the shape of fixed rate energy contracts. Even Ofgem is urging people to take these contracts, advising that perhaps now is the time to fix a rate before it rises again.
Fixed-rate energy contracts introduce an element of certainty in a normally unstable market. By locking in the rate for a certain term, usually one or two years, customers are protected from price volatility uncertainty. This can be particularly beneficial for low-income people, as it helps facilitate better budgeting and possible enormous savings if prices continue to go up.
But care and caution should be taken in committing to fixed contracts. While they can be reassuring, they are not always the best deal in the long run, especially if energy prices dropped abruptly. Deals from different suppliers should be compared and terms and conditions read carefully before subscribing.
Whether to lock energy prices in or not will be determined by their overall situation. Consider your current energy usage, how long the fixed period is for, and what penalty there might be for exiting early if circumstances alter. Be aware too that some fixed-price offers will entail a credit check, which can be a problem for those with bad credit records.
Now that we are reaching April, it is time to act. With experts forecasting increases in the price of energy in the future, acting to obtain a good rate is a shrewd financial move. Taking control and looking for yourself may minimize the blow of increased prices and enable you to keep a tighter hold on your family expenditures.
With soaring energy prices, it’s critical that benefit claimants are aware of the government schemes available that can assist with reducing the burden. They can be an invaluable assistance and can be used alongside policies like capping energy prices.
For people who want to improve the energy efficiency of their house, the Energy Company Obligation (ECO4) scheme is worth considering. This makes larger energy companies supply funding for energy-efficient home improvements, such as new boilers or insulation. For benefit claimants, this may translate into being given these improvements for free or at minimal cost, and this can pay off in terms of long-term savings on the energy bill.
If you’re not sure whether fixing your energy price is the best option for you, it could be worth talking to independent energy advisers or consumer rights groups. These professionals can give you tailored advice on your individual situation and assist you in understanding the intricacies of the energy market. Head over to Home Energy Guide to learn more about OFGEM’s decision, how to contact the most reliable energy grant providers on the market and to get access to free energy saving tips!
While the threat of increasing energy prices in April is chilling, there are means by which recipients can shield themselves from the impact. Shopping around for a fixed-rate energy contract, coupled with government energy initiatives can be a strong protection against escalating bills.Â
