Uswitch comments on Cornwall Insight’s latest price cap prediction

Richard Neudegg, director of regulation at Uswitch.com, comments: “Cornwall Insight’s price cap prediction will be welcome news to consumers, as it would save the average household £440 compared to the Energy Price Guarantee from July.

“Although this is still high by historic standards, it is a sign that the energy market is starting to stabilise, which should encourage suppliers to start bringing back competitive fixed deals.

“Competition in the energy market will give consumers the chance to vote with their feet and choose a supplier that best meets their needs for price, customer service or green credentials.

“When fixed deals return, consumers will need to weigh up whether signing up to one is the best option for their individual circumstances.

“Over the duration of a fixed deal, the price of the standard variable tariff (set by either the Energy Price Guarantee or the price cap) could increase or decrease depending on a number of factors. 

“One benefit of a fixed deal is that it gives consumers more certainty about what they will be paying for the duration of their deal, whether that is over 12 or 24 months. 

“If wholesale prices rise again later this year, a fixed deal could end up being better value especially if priced lower than the cap. However, the opposite could be true if wholesale prices fall further and the cap is lowered again during the fixed term. 

“This means that no-one can be completely sure whether sticking with a standard variable tariff or opting for a fixed deal will be cheaper in the long run, and either option should be carefully considered.

“With the possibility of fixed deals on the horizon, it is more important than ever to keep an eye on what is happening in the energy market. To get yourself energy ready, sign up for market updates through Uswitch so you can be alerted as soon as deals become available.”