Customer news

You may have seen in the news that the energy price cap is coming down in July, which means energy prices will be less. However, it’s likely to still be cheaper in the long run to go on a fixed tariff before then. This article explains why. 

What is the price cap? 

The price cap is set by the energy regulator, Ofgem. It’s a limit on the maximum rate that customers can be billed for their energy use. In other words, it’s a cap on what a single unit of energy costs (rather than a cap on what you could end up paying, which depends on your energy use). 

The cap is reviewed and changed every three months, with new rates taking effect in January, April, July, and October. 

Most people are on a ‘standard tariff’ for their energy bills. This is where your prices depend on the changing energy price cap. It can sometimes be cheaper to lock into a ‘fixed tariff’ that will guarantee your prices stay the same. 

What is a fixed tariff? 

A fixed tariff locks in the cost of your energy for a set amount of time, usually 12 months. This means you won’t be affected by any changes in wholesale prices as a result of the price cap throughout the year. You’ll know exactly how much you’ll pay per unit of gas and electricity for the whole of your fix.  

Is it cheaper to be on a fixed tariff? 

Although the price cap is coming down in July by 7%, for lots of people, it will be cheaper in the long run to move to a fixed tariff before 1 July 2025. 

You might pay slightly more over the summer months compared to those on a standard tariff, but when winter comes, you won’t be affected by any price cap increases. 

Fixing now, before July 1 2025, could save you money over the next year. This is because there are currently deals cheaper than the current price cap.  

Which tariff should I choose? 

The best deal for you will depend on your region and usage. You can use Money Saving Expert’s Cheap Energy Club to see the top deals for you, or look at their Should you fix? guide for more information on all the options available. 

Is switching tariff difficult? 

No, switching is easy to do. The only thing that changes is the company you’ll get customer service from and who bills you. Your supply won’t cut out because of switching and no one will visit your home unless you want or need a smart meter installed. 

Where can I get support? 

If you’d like help or advice with your energy bills, get in touch with our friendly team by calling 0300 555 0500 or emailing mb-welfarebenefits@chp.org.uk. 

You can also find support on Ofgem’s website and at Citizens Advice.