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Fixed price tariffs save £250 a year, says Ofgem


Energy regulator Ofgem has claimed that customers could save up to £250 a year by simply switching to a fixed rate tariff.

This is despite the fact that four of the “Big Six” energy companies have cut their standard rates for gas in the last few weeks. British Gas, Scottish Power, and Npower have all agreed to reduce their tariffs in February thanks to wholesale prices falling, and Eon lowered their prices with immediate effect earlier in the month. The suppliers have been criticised for not lowering their prices sooner, and not reducing them further, as wholesale prices have fallen by as much as 20% since November 2014. The suppliers argue that the wholesale price only makes up around half an ordinary gas bill.

Ofgem has claimed that even with these reductions, customers would still be better with a fixed rate deal. Price comparison website MoneySuperMarket conducted their own study and found a similar outcome, claiming that customers could save up to £266 a year by moving to the cheapest fixed-rate deal.

Dermot Nolan, Ofgem's chief executive, said:
"While recent price cuts are a step in the right direction, many customers could be better off to the tune of up to £250 by moving from a variable rate to a fixed rate deal"

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