Energy customers could be better off switching to a fixed price tariff than a variable one, according to Ofgem.
The regulator’s latest research found fixed tariffs currently offer lower rates and could save consumers up to £250 a year despite the recent cuts to variable prices.
The report also revealed independent suppliers offer some of the cheapest fixed deals at around £915 a year compared to £1,165 for the average variable tariff with one of the larger suppliers.
Variable tariffs have no set end date and prices are not fixed so suppliers can change them as long as they give customers advance notice. They don’t have exit fees so consumers can switch whenever they want.
According to Ofgem, around 60% of customers are on variable tariffs.
Ofgem CEO Dermot Nolan added: “We are seeing companies compete for consumers interested in taking a fixed price deal. However, we are not seeing rigorous competition between suppliers that benefits all consumers.”
He is urging consumers to Be an Energy Shopper and bargain hunt for a better energy deal.
Earlier this week the regulator announced new rules for energy price comparison websites.