Benefits of Fixed Energy Plan
Thinking about switching energy supplier? But not sure what the best option is for you and your household – fixed energy plan or a variable tariff? Switching energy supplier isn’t something you want to spend hours/ days thinking about however it is vital for you to choose the right plan. Importantly so, that you are able to get the best value. Here are some benefits of fixed energy rates for more clarity.
So why choose a Fixed Rate Energy Plan:
If you’re on a fixed tariff and wholesale energy prices increase, or your supplier announces a price rise, your unit rates won’t change. This means fixed energy tariffs make it much easier to budget since, assuming you use the same amount of energy each month, your bills won’t increase for the duration of the fixed rate. It’s a bit like having a fixed rate mortgage – you’re protected from changes in the Bank of England base rate which affect variable rate mortgages.
Fixed rate tariffs can be good value and cheaper than variable rate tariffs (although not always, so do your research). Year-long fixed deals can often be cheaper than variable rates but you might pay a premium for the security of fixing for two years or longer.
Almost all suppliers offer fixed energy tariffs so there’s lots of choice. Fixed lengths are normally for 12, 18, 24 or 36 months. Suppliers must remind customers a fixed deal is coming to an end 42 to 49 days before the contract expires. For instance, this gives you a chance to switch supplier without paying exit fees.
Security & Control
Fixed rate tariffs give you security and control over your monthly budgets. Whereas, variable energy rates are more likely to fluctuate month by month. Whenever rates are go up, your bill will also see an increase.
Cost is a major factor for many, therefore its easy to be attracted to cheap, variable tariff options. But you need to remember that while a variable tariff rate may be the cheapest at the outset, it might not be in the future. You’ll need to pay attention to any price hikes from your supplier and, if these are likely to cause your bills to rise significantly, shop around for a new tariff.
Choosing between a fixed or variable energy deal is very similar to choosing between a variable or fixed mortgage deal, and both have their merits. However, the best type of tariff for you will depend on your personal circumstances, what you expect energy prices to do in the future, and your attitude to risk.
Above all, if you are looking for a bit of peace of mine, want to take control of your monthly outgoings – then switch to a Fixed Rate Energy Plan. Fixed Energy Plan
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