For How Long Should You Fix Your Energy Price?

Written by Karen Bryan

Our 12 month fixed price contract for gas and electricity supply expires in mid March 2017.

I’m in a quandary over which new tariff to choose. It will definitely be a fixed price tariff, as there are several fixed price energy deals which are cheaper than the standard rate.

The question is for how long a period to fix.

The one year fixes are the cheapest, and some don’t even have an exit fee (charged if you want to leave the contract early).

However, if energy prices do increase significantly, I could save more money by signing up to a two, three year or even four energy contract.

The longer the period for which you fix, the higher the price charged. Plus the higher the exit fees.

For the last couple of years, I have signed up to one year fixes. Two years ago, it was a collective tariff with E-on organised through our local authority. Last year, it was the cheapest one year fix which I could find with GB Energy.

Although my main focus is price. I also take customer service into account.

The Avro and Edf one year fixes, with no exit penalties, look attractive.

If I decide to go for a longer fix, the SSE two year fix sounds reasonable. But it costs around 8% more per year than the cheapest one year fix. Therefore, gas and electricity prices would have to increase quite a bit in price for me to save money by opting for this tariff.  Plus, the SSE deal comes with a £50 dual fuel exit fee.

I need to get out my crystal ball as I’m finding it difficult to judge by how much energy prices will increase over the next few years.

But I need to make a decision and switch our energy supplier soon, as GB Energy don’t have any attractive deals on offer.