Emily Seymour, energy editor at consumer publication Which?, said that while there were some fixed deals with rates close to the April price cap, most of them would save households “very little” when it comes into force.
She said: “With the price cap predicted to remain fairly stable for the rest of 2024, more competitive deals may become available in the coming months.
Energy providers have ramped up exit fees in recent years, meaning that a household looking to ditch an unfavourable rate will likely pay £150 – £75 per fuel.
Ms Seymour said: “As a rule of thumb, we wouldn’t recommend fixing a contract longer than 12 months, higher than the April price cap or with significant exit fees – in case circumstances change and you want to switch to a better deal.”
Several providers have introduced fixed rates that are significantly cheaper than the current cap, but such fixes may end up costing consumers more in the long run.
British Gas’s Price Promise, unveiled last week, is £229 a year cheaper than the January-March cap, and then switches customers to a rate cheaper than the April cap.
However, customers who sign up for this deal are then locked into the April rate for a year, and are hit with a £150 exit fee if they attempt to revert to the standard variable rate– even if they stay with British Gas.
The provider will waive exit charges if the customer switches to another fixed rate with British Gas, but the only fix the provider offers is £1,799 a year, which is slightly cheaper than the January cap, but significantly more expensive than the April rate.
Meanwhile, Octopus Energy’s Loyal 12-month fix saves a mere £15 a year compared to the average bill under the April price cap – and is only available to existing customers, according to comparison website Uswitch.
E.On Next’s Pledge Tracker 12-month offer promises to track a £50 a year saving on the price cap regardless of how low it falls. The deal is available to new and existing customers.
Utility Warehouse’s Fixed Saver 6, meanwhile, works out as £100 cheaper than the April price cap. The catch here is that customers must also sign up for two other services offered by the provider – such as mobile and broadband.
Will Owen, Uswitch energy expert, said: “It is important that consumers look at the fine print of any tariff they are considering to understand what they are signing up to. It is always worthwhile comparing tariffs with other deals to check if it is right for your circumstances.”
Proponents of fixed-rate deals argue they offer long-term security, as unlike variable tariffs they cannot change throughout the duration of the deal. This could shield households from shocks in the wholesale market.
However, analysts across the sector predict the cap will fall again when it is reviewed in July, meaning consumers who take that risk now could end up paying an inflated rate for their power use.
Dr Craig Lowrey, of analysts Cornwall Insight, added: “Those seeking alternative options to bypass the high cap prices through the return of fixed tariffs will need to manage their expectations, as the availability of deals below the cap is still uncertain.
“Even for those able to secure a below-cap rate, it remains a risky decision. There is a possibility that the cap could decrease, leading to consumers locked into higher-than-market prices.”