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Capped Tariff Ending?

Beat hikes; Compare, ditch & switch

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Updated 17 May 2012

Energy prices have steadily risen in the last few years and capped and fixed tariffs have offered surety to those wanting to dodge the hikes.

Yet when they end many will get a shock as prices usually jump. This is a special capped/fixed energy switchers' guide to beat the traps.

What is a fixed or capped tariff?

Fixed tariffs mean the price per unit of energy used is set for the term of your energy contract. Capped tariffs are ones where the price cannot rise but it can fall.

Why a special guide?

In early 2008, it was likely prices would rise, so on this site and elsewhere, capping/fixing became an option for those who needed surety. By July 2008, here and on GMTV (now Good Morning Britain), Radio 2 and elsewhere Martin was yelling "if you can't risk a price rise, grab one of last three cheap capped tariffs to lock-in at pre-price rise rates".

Within days, British Gas announced a 35% rise in gas and 9% rise in electricity prices and those last cheap caps ended. Luckily the message had spread in time; so much so, one price comparison service estimated it was the biggest switching week in its history, bigger than any previous MONTH!

Step 1. When does your deal end?

All the different capped/fixed tariffs have various characteristics, and before you start the switching process it's important to know exactly what yours is, so grab the paperwork and find out.

  • Get your deal's precise name

    Lots of suppliers offer tariffs with TINY name differences, so check the name and when you switched. For example in the past E.ON has had FIVE 'Price Protection October 2009' tariffs, yet the price paid depended on exactly when you got it.

  • Is there an exit penalty?

    Many tariffs have penalty exit fees of £30-£75 if you leave early, so it's important to know if yours does. It should be on your annual statement, if not, call your supplier and ask.

  • What's the end date? Time your switch

    It's crucial to know exactly when your deal ends. If it's already ended, then you could be overpaying. If it's due to end soon, you need to time your switch right. If it doesn't end for a while, don't switch away from it unnecessarily and be hit by an exit penalty.

    Switching normally takes six weeks to three months to happen, so it's usually okay to do a comparison and switch six weeks before it ends. A couple of comparison services ensure you won't be hit by a penalty by offering a timed switch.

    If there's no exit penalty on your tariff, there's no harm doing a comparison to see if it's worth switching now, even if it's not due to end yet.

  • Find out what the 'go to' tariff is

    It's worth calling up and double-checking with your energy provider what'll happen when your capped tariff ends. Usually you go to the provider's standard tariff (like a Standard Variable Rate (SVR) on a mortgage) which is likely to be considerably more expensive.

    Yet check; it might offer you another fixed or capped tariff, see the should I cap again? section for whether that's a good idea.

Step 2: Compare, ditch & switch

Normally, finding the cheapest energy supplier is simple. Just use a comparison service to tell you. Yet it's a problem if you're on a capped or fixed tariff, as comparisons are based on the prices of the cap/fix, not the rate it'll go to when it ends - and that's what you really need. Plus there's a risk that if you switch early you'll be hit by a penalty.

Having raised this issue, one comparison service agreed to follow the MSE logic and develop a system to help those with capped or fixed deals due to end. Since then, another also offers a similar service - see below for details.

light bulbSwitch and get added cashback

By specifically clicking via these special links to get to the comparison sites and not going direct, you also get paid cashback or freebies on top, provided they can switch you (why they pay).

  • Capped comparison services. Get £15 cashback per switch or a crate of wine

    Our top pick, based on historical reliability, feedback & research is Energyhelpline*, which pays £15 cashback per switch whether it's gas, electricity or dual fuel, and includes a special capped/fixed comparison service.

    Alternatively uSwitch* and MoneySupermarket* also factor in capped tariffs to an extent. uSwitch gives a crate of wine for dual fuel switches, MoneySupermarket £30 cash. it'll give you a crate of wine worth about £40

    How the special service works:

    Do a comparison with Energyhelpline and if you're within 12 months of your deal ending, it will automatically show you the savings based on the tariff you're most likely to move to, rather than the rates you're currently on (though you can opt to see that too).

    If you have less than two months to go before your deal ends but will be subject to exit fees if you leave early, Energyhelpline gives you the option to hold your switch until a time when you won't be penalised.

    With Uswitch, pick a tariff that's already ended and it will prompt you to enter your existing tariff as the standard (which is what you're likely to be moved to after the cap ends).

  • Alternatives for freebies. £30 dual fuel

    For a dual fuel switch, which means getting gas and electricity from one provider, you can get bigger freebies (one per household).

    The following simply compares your existing capped tariff to other available tariffs, meaning for those whose cap is ending soon it's not that relevant.

    Alternatively simply enter the tariff you know your cap will switch to and do a comparison based on that.

    £30 cashback: Moneysupermarket*

More detail, top picks and a possible cashback boost

When is the cashback paid?

Cashback's usually paid 45 to 90 days after you sign up, but remember it's only paid when the comparison service actually administers the switch for you, otherwise it doesn't earn anything, so it can't cut you in.

Note: Do remember these deals are specific to the links below; go direct and they're not offered.

The Top Picks in Detail

Our top picks are assessed on a mix of feedback from MoneySavers, cashback (or wine), inclusivity of tariffs, and functionality. Here's a more detailed explanation.

  • Capped/fixed comparison service. £15 cashback per switch

    Our top pick, based on historical reliability, feedback & research, is Energyhelpline*, which pays £15 cashback per switch whether gas, electricity or dual fuel and includes a special capped comparison service.

    Get a voucher for 8 bottles of wine worth £40

    Rather than cash, Uswitch* gives a voucher for 8 bottles of wine from Virgin Wines when you switch to a dual fuel tariff. It's a maximum of one per household. And don't worry, you don't need to buy anything else from Virgin to redeem it.

    Ensure you go via the above link to get the deal, if you go direct to Uswitch you get a different voucher that's only for £40 off.

  • Top for Cashback. (No capped comparison)

    The winner depends on which deal works out cheapest for you.

    Only got electricity: Moneysupermarket* pays £17.50

    Switch to separate gas & electricity providers: You can get £30 (£15 per fuel) if you're switching to separate gas and electricity suppliers via Energyhelpline*, Energylinx*, and UK Power*.

    Or SimplySwitch* gives £20 cashback per single switch.

    Dual fuel: This means you get gas and electricity from the same supplier, Moneysupermarket* pays £30, SimplySwitch* pays £40.

How much cashback?
Energy Service
Switch to separate
Gas & Electricity Suppliers
Switch to
Dual Fuel
Energyhelpline* £30 £15
uSwitch* - 8 bottles of wine
worth c.£40
UK Power* £30 £20
Energylinx* £30 £15
MoneySupermarket* £17.50 £30
SimplySwitch* £20 £40
TheEnergyShop* - £20

You may've noticed, there's no inclusion of the charity-donating comparison switch sites, such as Switchandgive, which pays £20 to charity for dual fuel switching. That's because switch via the sites above, donate the cashback to charity, and the tax advantages of you donating mean the charity gets more anyway (see the Increase your Charity Giving guide).

Don't use these comparison services for other things

These sites can also include commercial comparison services for credit cards and home phones. Yet the articles here usually substantially undercut them (see UK Home Phones and the Credit Cards articles).

It may be possible to INCREASE the cashback...

flameOccasionally some energy companies will pay even more if you switch directly via their websites or via cashback websites. So for the ultimate finesse, first use the comparison services to find the cheapest, then check the winner's website direct to see if it offers more cashback.

Also check if you can get more going via a Cashback Website both to go to the energy provider itself and on rare occassions for going to the comparison site (use the Cashback Sites Maximiser).

When you switch only customer service, billing and, most importantly prices, change and hopefully you'll save. The pipes, circuits, wires, safety coverage and actual gas and electricity flowing through the house are all the same.

The new supplier performs the switch; all you do is take a meter reading. Of course, there've been many switching 'horror stories' and sadly these still happen, but for most it's a smooth process.

For more information on switching in general, and tips to cut your bill, see the main Gas & Electricity guide.

Capped Switching Q&A

Which tariff should I switch to?

There's a huge choice of tariffs out there to switch to. Here are some quick tips...

  • Go green. More expensive but good for the environment, most comparison services let you sort by green tariffs.
  • Online tariffs are cheaper. It's usually up to 10% cheaper to get an online tariff (it just means you're billed online - they haven't yet worked out how to get the energy down the web yet).
  • Don't assume dual fuel is cheaper. Sometimes getting separate cheap gas & electricity suppliers wins, check both.

For more details on all of these see the picking the right tariff section of the main guide.

How you pay is also important, you'ill save up to 10% if you opt for monthly direct debit, though if you do always ensure you do a meter reading. See the more savings section of the main Cheap Gas & Elec guide for more.

Is now the right time to switch?

As your capped tariff is coming to an end, it's likely you'll be put on your provider's standard tariff, which is usually horribly expensive, so it could be worth you switching anyway regardless of the bigger picture.

The worst time is when just one provider has shifted prices, as providers have a herd mentality and will usually follow.

To see what's happening with prices, see the latest news section of the main Cheap Gas & Electricity guide.

Was capping worth it?

Well, the main reason for capping is to get price surety - insurance against any future price rises. So, as in the last few years prices overall have moved up (with some small price cuts in 2010), if you fixed at the right time this has worked.

Exactly how much you saved will depend on when you capped and how long you capped for.

If you got one of the cheaper capped tariffs in July 2008 when prices were particularly vulnerable, you got in just in time; soon afterwards, British Gas increased gas prices a MAMMOTH 35% and electricity 9%.

It's likely most people made the bulk of savings between the big price hikes in July 2008 until the round of smaller cuts in January, since then the savings from being on a cap have shrunk.

Overall it's possible a few people could've ridden the waves of the cheapest online tariffs and undercut some of the less competitive caps. Yet like a fixed rate mortgage, the point of capping was for security against more price rises, in the end many got that and saved big bucks too.

Should I cap again?

The main consideration is if you can afford a price rise. If not, a cap is an insurance policy against that happening, though of course that doesn't guarantee it to be cheapest overall. Capping/fixing comes at a price as you'll usually pay a £30-£70 penalty to leave during the fixed time.

Capped/fixed tariffs can be more expensive than normal tariffs, but more recently they've been among the cheapest tariffs.

Whether they'll be good value over their life is impossible to say, as it depends on competitive pressures, movements in wholesale gas and electricity prices, and exactly how much more you need to pay to cap.

There's more info in the should I fix? section of the main Cheap Gas & Elec guide.

How do I ask a question not above?

You can suggest your question in the Capped Energy Tariffs forum discussion. While we can't answer personal questions we will try and review any issues missed and add them to this guide.

Also while there, you can chat through issues with other MoneySavers who may be able to help and make suggestions (though do remember it's an open forum so anyone can post there).

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