Ofgem has offered advice to households to “think before you fix” with regard to deciding what energy tariff to go onto.
Ahead of the next energy price cap being decided fixed-rate energy tariffs have started entering the market as options again.
When you sign up to a fixed deal, the rate you pay for energy won't change for the length of your contract.
This means you are protected from any price rises should the Ofgem price cap increase, The Mirror reports.
However, if rates drop, you won’t see your bills fall alongside it, which is the consideration Ofgem are asking customers to consider.
⚠️THINK BEFORE YOU FIX
— Ofgem (@ofgem) August 9, 2023
Fixed-rate energy tariffs have seen a return to the market but check if they are right for you.
Prices are still unpredictable and signing up for a fixed rate now might mean you miss out if prices fall in the future.
Helping you be #EnergyAware pic.twitter.com/Ngw51BcwOA
What are Ofgem saying people should do?
In a tweet, Ofgem said: "THINK BEFORE YOU FIX. Fixed-rate energy tariffs have seen a return to the market but check if they are right for you.
"Prices are still unpredictable and signing up for a fixed rate now might mean you miss out if prices fall in the future. Helping you be #EnergyAware."
The Ofgem price cap has just fallen to £2,074 a year for dual-fuel households with typical energy use, paying by direct debit.
Analysts at Cornwall Insight currently expect the price cap to then fall to £1,860 from October, before rising to around £1,960 in January.
Ofgem will confirm its next price cap on August 25 and this will cover the period from October 1 to December 31.
For further advice on what action to take MoneySavingExpert.com founder Martin Lewis has said his current “rule of thumb” is that any fixed rate that is less than the current price cap could be “a decent deal”.
He added: “Of course, current predictions are just predictions, so I can't promise to be right with hindsight.”
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