Cheaper fixed-term gas and electricity deals could make a comeback within months, experts are predicting. Soaring bills have virtually put an end to the practice of shopping around for the least expensive tariff as suppliers have been unable to offer anything significantly cheaper than the energy price cap.
In 2019 almost 500,000 customers were switching suppliers every month. But in 2022 just 85,000 households were changing providers each month.
However, energy consultancy Cornwall Insight said the number of customers switching to a new supplier could soar from the start of July.
Government support currently reduces average bills to £2,500. That support will become less generous from the start of April, when it rises to £3,000 - as a result, the price of energy is likely to fall below that level from the start of July, Cornwall said.
Kate Mulvany, Cornwall Insight senior consultant, said: “The energy market is complex, making it difficult to predict the effects of policy changes on consumer behaviour and energy pricing.
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“However, if suppliers’ costs decrease and government-supported rates remain relatively high, it is likely we will see a significant revival in reasonably priced energy plans, with millions of households finally able to take advantage of the savings they have been missing out on for years. There are many variables still in play, and it is difficult to know how fast and how far energy bills will fall.”
She added: “To see rising switching we are also relying on consumers engaging with an energy market, which many are understandably wary of. It is possible some households may choose to stick with what they know instead of choosing cheaper options.”
Richard Neudegg, director of regulation at Uswitch.com, said: “The return of fixed deals to the energy market would finally give consumers the freedom of choice over their supplier with an option to lock in more certainty on pricing. With wholesale prices stabilising, though still high compared to past years, there is an opportunity for suppliers to start offering more competitive rates.”
