Proactive Investors - British Gas has joined other UK energy suppliers in offering fixed-rate tariffs for the first time in several years as energy prices recede.
Centrica PLC (LON:CNA)-owned British Gas now offers new and existing dual energy customers a yearly rate of £1,099 on average, though prices vary on location.
In London, a house consuming the typical amount of gas and electricity would pay £2,049 for a one-year fix from British Gas, according to Go Compare.
Broken down, this includes daily standing charges of 28.83p and 37.91p, alongside unit prices of 7.51p and 31.19p for gas and electricity respectively.
Though customers could indeed benefit if prices soar again this winter, they would face a £200 early exit free on the British Gas deal, making switching difficult if wholesale costs drop.
London-based Utility Warehouse, which caters for almost 900,000 customers, charge less than the UK’s largest supplier meanwhile, offering a one-year fix for £1,961.
Though the deal does require other services be bought from the supplier, Utility Warehouse bills customers less for switching early, at £150.
For context, Utility’s energy deal includes standing charges of 22.26p and 31.33p for each fuel, paired with rates of 7.50p and 30.60p for units of gas and electricity respectively.
Suppliers had all but scrapped the deals as prices crept up after the pandemic and Ukraine war, limiting households instead to variable rates which are effectively governed by Ofgem’s cap.
Since the unit price-determining cap has fallen below the government’s £2,500 guarantee, to £2,074 currently, analysts have tipped that suppliers will launch more competitive deals.
Other large suppliers have indeed launched fixed-rate deals, including the likes of Octopus, Ovo and EDF (EPA:EDF), with these also sitting around the same level as Ofgem’s cap.
Though Ofgem previously warned that customers may miss out on future savings by fixing bills, analysts have said the certainty of doing so could be worth it.
Consultancy Cornwall Insight anticipates Ofgem’s cap will fall again in October, before rising marginally to £1,917 come January.