Benefit of Capping Energy Bills

Switching to a capped energy deal could help consumers protect against future price rises, according to the latest industry research.

Capped deals, offered by companies such as British Gas, Powergen and Scottish Power, allow consumers to fix their energy bill for up to four years.

For example, Price Protection 2009 from British Gas lets customers fix their energy bill until April 30th 2009 or alternatively Powergen's Capped 2010 (the longest capped tariff available) will fix your energy bill until March 1st 2010.

A leading price comparison site said using these deals could help consumers reduce the cost of energy bills.

Capped deals can be more expensive though – the average bill from British Gas is £533.51* whereas a capped bill from Powergen would be £780.91* a year (but fixed for four years).

"The higher cost of capped deals may mean that consumers are hesitant to switch, remaining on the standard tariff instead," said the Head of Utilities from a leading price comparison site.

"Energy customers should not be too hasty in choosing a capped deal, but with the likelihood of further increases later in the year, they should seriously consider the capped deals currently on offer."

Considering gas bills have risen 40 per cent since 2003 and electricity bills by 30 per cent, consumers may feel price protection could be a more pertinent choice.

But consumers are also warned to watch out for cancellation penalties if they decide to switch back to standard tariffs.

Get the best energy prices by comparing deals with our Energywatch accredited comparison tool.