Those households which flocked to secure a fixed price energy plan when costs were on the rise last year could be set for an energy shock when the deals come to an end, uSwitch.com has warned.
Last year, energy bills
shot up by an average 42 per cent – or an additional £381 a year – driving hoards of UK households to snap up one of the timely fixed price deals that energy companies were offering.
But, comparison website uSwitch warns that customers who took out a fixed energy tariff
in July 2008 could see their bills rise by as much as £100 when the deal ends this summer.
Data from uSwitch shows that 4.6million households in the UK are currently on a fixed or capped energy price plan
, with many due to come to the end of their deal by the end of 2009, so it is urging consumers to compare gas and electricity
prices thoroughly before signing up for their next one.
Moving back onto a standard tariff could prove costly for households whose prices have been fixed, as energy prices have not subsequently fallen back by even half as much as they rose last year.
The average fixed or capped energy plan taken out in July 1008 costs customers £1,045 a year, but the average standard tariff now costs £1,145 a year, uSwitch's calculations have found.
With prices expected to fall further, those who opt for another fixed price plan could be left paying over the odds for their energy, uSwitch warns.
Following several cuts in energy costs this year, an online energy plan
taken out now could be cheaper than the fixed price plans taken out a year ago. Consumers could secure a deal on the internet which is £27 cheaper than the average fixed plan taken out last July, so they could end up better off, but only if they compare energy prices, uSwitch stresses, otherwise they could see their bills go up.
"Without a doubt, those who fixed their energy prices last year, avoiding the price hikes that hit other households, have done really well," said Will Marples, energy expert at uSwitch.com. "However," he continues, "with their price protection coming to and end they could face a bill shock if they don't start looking around for their next deal. They cannot afford to just move onto a standard plan or accept a new fixed or capped deal from their supplier without doing their homework first.
Despite the potential savings to be made with online energy pans, just five per cent of UK households are on them, Mr Marples said, urging anyone whose fixed price plan is due to end soon to sign up to one, as well as opting to pay by direct debit, and moving to a dual fuel plan to save even more money.
Mr Marples warns those who are eager to sign up to another fixed or capped energy price plan straight away that this might not be the best deal and they should do some research first. This could be especially bad value for money if prices drop again and they want to move to a better deal but find that their energy provider charges a fee for leaving before their deal ends.
He encourages consumers to check the small print carefully and "ensure that an energy plan meets their needs before signing on the dotted line."
Mr Marples concluded: "Fixed plans are definitely right for some consumers, but in a time of potentially falling prices they could be the wrong move for many more." Compare gas and electricity prices »
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