Time To Fix?

Oil prices have been rising sharply and with worries over possible war in the Middle East – there is a lot of nervousness around what might happens to energy prices. So is it time to fix your energy deal?

Q: What has happened so far to oil prices

In May Brent Crude was $60 a barrel. Today it is $77. Just this month it has risen 20%.

That is not a record by any means – this time last year it was around $87.

So, the market is lower than it was a year ago – but I suppose it does throw the price cap into question and is likely to put some upward pressure on energy prices

It also won’t help the government’s push to try and lower energy proices for UK industry to make it more competitive. There is a plan which may slash energy bills by up to 25% for more than 7,000 UK businesses, is set to be unveiled on Monday alongside other measures aimed at boosting growth.

The thing that would likely trip the markets into a spin is if there was any disruption in shipping through the Strait of Hormuz which is on the Iranian coast. Almost a third of global seaborne oil trade moves through it. There is talk that any problems there could push brent bove $120.

It is also striking that despite the rise in uncertainty and tensions – investors certainly in the UK seem qutely optimistic. The FTSE 100 is up 6% on the year and 13% up since the dip in March – so there is a bigger question of are the market nervous enough? Maybe they are suffering from chaos fatigue and seem to shrug off these fears as there have just been too many of them.

Q: So, should we switch to a fixed rate deal – to safeguard ourselves from the uncertainty?

If you are not on a fixed deal you are subject to the price cap where prices change every three months.

So in making that decision you have to look at what is going to happen to the cap and then compare it with the current best fixed deals.

65% of homes in England, Scotland or Wales are on a standard variable tariff, so the price they pay is controlled by the Energy Price Cap

The Energy Price Cap, which controls what most households pay for energy, will fall by 7% on average on 1 July 2025. But most price capped deals last between 12-24 months – so you have to look at what might happen after this price cap and that itself is rather uncertain.

Part of the reason to move to a price cap is not just the potential savings – but the removal of fear and what price you out on that.

On 1 July 2025, the Price Cap will fall by 7% to £1,720 a year from £1,849 a year for a typical use household paying by Direct Debit. Though remember, it's the rates that are capped, so use more and you pay

If you pay by cash, cheque, the Price Cap is £1,969 a year on typical use, from 1 April 2025. From 1 July to 30 September, this will fall to £1,855 a year.

Q: What are some of the notable deals out there?

They change all the time but the ones that have peaked my interest are:

But be careful and watch out for exit charges

Outfox Energy 8

5% lower than July Cap. 

Dual-fuel only

Tulko Energy12 month fix.

7.8% lower than July Cap. 

Dual-fuel only

Fuse

15% lowet than July cap

Electricity only fix

Q: Although it is very hot at the moment – people have already been looking ahead to winter and the government has changed its mind on Winter Fuel Payments – how will that affect people?

All State Pensioners in England and Wales will receive a Winter Fuel Payment this winter, though those who earn over £35,000 will see it clawed back through the tax system. It means nine million pensioners will get the £200 or £300 top-up. The higher payment is given when there is someone in the house aged 80 or over.