

Martin Lewis: On a FIXED energy deal? Will you pay less under the new 1 Oct price guarantee?
There are currently no fixed tariffs that will save you money compared with the Government's new price cap guarantee. But what if you're already on a fix? Under the guarantee, it's now confirmed that prices will drop for most, but only at most to the level of the new price cap that's on variable tariffs. Here's how it works if you're on a fix.
Update Monday 17 October: The Government has now announced that the universal energy price guarantee will only last until April 2023, rather than for two years as planned. It said it would launch a "Treasury-led review" to look at how it will help households and businesses with energy from next April.
If you're on a fix, Martin gave his best guess as to what it means, based on what we know so far. He said:
- "If you're on a fix below the guarantee. Nowt has changed. Your fix will remain for the full term.
- "If your fix was higher than the guarantee rate, but was reduced by up to 4p per kilowatt hour (kWh) for gas, 17p per kWh for electricity, which drops you to the price guarantee rate. It's likely this reduction ends in April.
"Some firms moved people in this position to standard tariffs, no idea on the legal position of that yet.
- "Your fix was reduced by 4p/kWh for gas, 17p/kWh for electricity, yet that still left you higher than the guarantee rate. You can switch penalty-free until November to your provider's price guarantee tariff. It's likely still worth doing as your energy prices will drop to the guarantee rate, but I need to do more analysis."
We'll update this guide with full info when more details are confirmed. For more info on the announcement, see our Chancellor's emergency fiscal budget MSE News story.
What you pay on a fixed tariff MAY be reduced, but definitely not increased
Technically the new price guarantee for standard tariffs is done as a reduction to the planned October unit rates. The Government has said from 1 October the same 4p per kilowatt hour gas, and 17p per kilowatt hour electricity reduction will apply to many (not all) fixed rates too. That's very roughly in the ballpark of a 30% decrease.
The reduction will only apply to fixes that will be more expensive than the price guarantee. Higher fixed rates will at most only reduce to the level of the new guarantee. The impact of that means different things depending on how expensive your current deal is...
- Very cheap fix: (for example, two-year fix from before crisis started). If you'll pay less than the new price guarantee, there's no reduction.
- Mid-level fix: (for example, fixed three months ago at a premium). If your fix is higher than the new price guarantee, it will reduce to the same level as the new price guarantee.
- High-rate fix: (for example, fixed very recently at high rate to forestall huge predicted future hikes). Your fixed rate will reduce substantially but a few of these may still be costlier than the price guarantee.
And a final note, as normal, when a fix ends, you should be automatically moved to the price guarantee rate, unless you choose something different.
If you're on a fix, it's safest to do nothing till you hear from your energy firm
The enormous majority of those on fixes will either be automatically paying less than the new price guarantee, or will see their fixed costs reduced to be the same level as it (so effectively are moved to a price guarantee tariff).
As explain above, a very few who fixed very recently may see a big reduction in cost, but still pay slightly more than the price guarantee. Yet a few have asked me questions...
How do I find out how my fix compares with the guarantee rate?
How much your fix will be reduced by depends on what you’re currently paying. There’s no easy way to check yourself, but suppliers are in the process of contacting people with their new costs right now.
If you don’t hear anything in the coming weeks, you can contact your supplier for full info.
If my fix is more expensive than the price guarantee, can I leave exit penalty-free?
The Government said "this is up to firms" BUT I've good news...
In the energy summit at MSE Towers on Tuesday 13 September with the big firms' CEOs, all firms there – British Gas, Ovo (SSE), Octopus, EDF, E.on, Shell – agreed to my request that customers who end up on fixes at a higher rate than the price guarantee WILL be allowed to move on to that firm's price guarantee tariff, with no early exit penalties, until at least 15 November (some beyond that).
While Scottish Power was not at the summit, it has also now confirmed to us it will allow customers to move with no early exit penalty.
Yet remember most fixes will likely be the same or cheaper than the price guarantee, in which case you won't need to do anything. And of course we'll compile firm-by-firm info when we get it in this guide.
MSE weekly email
FREE weekly MoneySaving email
For all the latest deals, guides and loopholes simply sign up today – it's spam-free!
Have your say in our forum!

Spotted out of date info/broken links? Email: brokenlink@moneysavingexpert.com
Clever ways to calculate your finances