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Ask An Expert: ENERGY

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How do I decide whether to go for a fixed deal or not?

MSE_Laura_F
MSE_Laura_F Posts: 1,568 MSE Staff
First Post First Anniversary Photogenic Name Dropper
edited 25 September 2023 at 5:56PM in Ask An Expert
I'll kick off the event with the first question, and it's a big one: how do I decide whether to fix my energy or not? 
3
3 votes

Ask An Expert: Answered · Last Updated

If you’re on a price-capped standard tariff, the most important thing to understand is the rates on your tariff are variable and change every three months in line with the Price Cap.

So when considering switching to a fixed deal, you need to look at what’s expected to happen over the next year with the Price Cap. We know prices will fall by 7% in October. Prices are then predicted to rise again in January (by 6%), before falling again in Apr (by 3%) and July (2%).

Factor all that in, and with some averaging, our best guess is that a deal for 5% LESS than the current Price Cap from July to September (or 2% MORE than October’s Price Cap) could be worth considering.

For full info, see our Should you fix? guide

Thanks

MSE Andrew
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This question and answer came about during the MSE Forum 'Ask An Expert' event in Sep 2023. It won't be updated so may no longer be correct at time of reading. This info does not constitute financial advice: always do your own research on top to make sure it's right for your circumstances.

Comments

  • MikeJXE
    MikeJXE Posts: 3,093 Forumite
    First Anniversary First Post Name Dropper
    Toss a coin heads or tails because no one has any idea which is the best to go for 
  • If you need to know what to pay every month (like I do!) then go for a fixed rate. Act on what you can afford now, not what might happen in a few months.
  • If you’re on a price-capped standard tariff, the most important thing to understand is the rates on your tariff are variable and change every three months in line with the Price Cap.

    So when considering switching to a fixed deal, you need to look at what’s expected to happen over the next year with the Price Cap. We know prices will fall by 7% in October. Prices are then predicted to rise again in January (by 6%), before falling again in Apr (by 3%) and July (2%).

    Factor all that in, and with some averaging, our best guess is that a deal for 5% LESS than the current Price Cap from July to September (or 2% MORE than October’s Price Cap) could be worth considering.

    For full info, see our Should you fix? guide

    Thanks 

    MSE Andrew


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