Get the Best Value for Money Tariff
Fixed rate contracts are among the most commonly selected options when it comes to energy tariffs in the United Kingdom. When you’re picking a fixed rate, you need to choose with care. Not only will you be locked into the selected rate for many months to come, but not all providers in your post code will offer the exact same rate for electricity and gas. If you discover a better tariff a few days after you sign a contract, you won’t be able to switch without fear of penalty in many cases. Here are some tips for how to compare electricity prices in the UK when it comes to fixed rates. Remember that you can often save even more cash if you also get a supply for your gas service from the same energy supplier.
Your electricity will be measured in units known as kilowatt hours, or kWh. The simplest comparison between different fixed tariffs is done by looking at the kWh rate that you are offered. While the difference between two energy providers may only be a few pence, over the course of one year or more you may actually end up paying significantly more if you choose the energy supplier that charges more. Once you are signed up for a fixed rate tariff, you are guaranteed that price for the duration of the contract, but you are unable to shop around for a better kWh rate again until your contract expires.
While contract length may seem unrelated to the cost of your electricity, your contract duration will very much impact the amount of money that you spend on power in the long run. If the energy market becomes more favourable after you opt in to a fixed rate tariff, you will miss out on the opportunity to reduce your bill for many months if your contract is too long. Most contracts require at least a 12 month commitment, but some suppliers might ask you to commit to as long as 24 months on the same fixed rate. Compare the contract lengths when you’re price shopping, and don’t sign a contract and longer than you feel comfortable with. Bear in mind that the market tends to fluctuate day by day, and on average fixed rate customers tend to pay more over time when they extend a contract.
If you need to exit your contract early, you may be tasked with paying an early termination penalty to your energy supplier to the tune of more than 100 pounds. However, some suppliers will let you leave early with no penalty at all. When you are not sure if you will be moving house within the next few years and decide on a fixed rate tariff, compare suppliers until you find one in your price range that doesn’t penalize you for leaving early. You may be able to transfer your service to your new home, but just in case you can’t you should shop for the best exit strategy. A penalty fee can quickly eat up any savings you previously gained on your fixed rate.
Residents who have prepayment meters cannot sign up for a fixed rate. You must pay the prepayment rate decided upon by the energy supplier, which unfortunately tends to be higher than the average fixed rate. However, if you have paid off your debt to your energy supplier and have a decent credit rating you may be able to ditch your prepaid meter for a standard one that allows for more freedom in choosing a tariff. At that point you can price compare and look at the different fixed rates on the market.
These tariffs grant you a more consistent monthly bill. If you don’t want to be completely locked into a certain rate, you can also get a capped tariff. These rates go up and down with the energy market, but you are guaranteed that they will never rise above a certain level. You can also compare electricity prices for capped rate tariffs, most easily on one of the energy market sites that are designed to help you compare the different options. Such websites include USwitch and UK Power.
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