Are Fixed Energy Deals worth it?
Energy prices have been going up, and up, and up recently – seemingly without letup. This is due to the rising cost of natural gas and oil, which the energy companies have unfortunately had to pass on to you, the consumer.
Even if you live as economically as possible, making sure your TV’s, computers & appliances are turned off – not just on standby, turning off all lights when not in use, buying energy saving light bulbs & insulating your home, you still cannot control the rising cost of energy.
You can, though, opt to fix your energy prices for a set period of time. Most energy companies now offer fixed rate deals – but are they really worth it?
Fixed rate deals – the advantages
Security – You know that for the agreed term (usually 1 or 2 years), your energy prices will not change.
The longer the fixed period lasts for, the more you should get for your money. Energy costs will likely continue to rise, so it won’t be long until you are paying less than you would have, had you stayed on a standard variable-rate deal.
Fixed rate deals – the disadvantages
At the start of a fixed rate deal, the cost of the energy you use is usually around 20% more than on a standard variable-rate plan. This means that you will be paying more until energy prises have risen 20%.
If you decide to leave the fixed rate deal before the agreed term has expired, it is likely that the energy company will charge you to do this.
When the fixed rate deal comes to an end, if energy prices have risen quite a lot since you first signed up to it, you will likely face a big rise in costs – which you may find hard to cope with.
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