Clear Up The Confusion Over Energy Capping

By Author: Jessia Szychowski
Total Articles: 4
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As the winter freeze gradually begins to lift and the days finally are finally starting to feel a little warmer, the last thing you probably want to think about is switching energy supplier. However, depending on the type of tariff you are on, your fixed-rate may be about to expire. In this case it''s a good idea to start thinking in advance about what company and type of tariff you choose to go with this time.

If you are already on a capped price tariff, in the first instance your existing supplier will probably be making you and offer on a new one. Before committing to anything solely out of ease, it is sensible to consider the options that are available and research into whether a fixed-price deal on your gas and electricity is the most cost effective way to go.

Energy capping is a fixed-price plan judged on the amount of units of energy you consume allows you to pay a set amount of money over a specified period of time. They became very popular in the UK at a time when the market was in a state of fluctuation, as they provide security to energy users against the threat of increasing fuel costs.

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... certainly have benefits, and if you have taken out such a plan, you may have already felt the positive effects of not having to worry about changes in price in the future. However, they also have their downsides, and as such there are a number of things that are worth considering when deciding whether to go this route.

The first thing to think about is whether you can afford to cap your energy bills. On average, capped tariffs are around 10-15% more expensive than uncapped tariffs as you are paying for the security against rising prices. However, you need to weigh this up against the money you may have to pay out in the future if electricity and gas prices increase.

Be aware that when taking out a capped energy tariff you will almost certainly be locked into this for a certain period of time. Caps normally last from around 1-3 years, meaning that if prices rise drastically during this time you will have definitely benefitted. On the other hand though, the majority of electricity companies will charge an exit fee for leaving a plan early, limiting your freedom to switch plans if prices fall.

If you are considering a capped-tariff, there are many options available for dual-fuel contracts, green-friendly, and other types of plans. Have a look at price comparison websites for that are available to you.

Ultimately, energy capping is about your own personal economic situation and the level of security that you wish to have. Certainly, people who have switched to capped plans have avoided the recent price hikes, but perhaps at the cost of greater freedom to move companies. If you are due for a change, remember that it may take a while to switch energy provider so make sure you do your research in advance. Jessia Szychowski is the author of this article about electricity. Visit British Gas to find out the latest gas and electricity prices for UK residential and business customers.