In a bold move that will be welcomed by cash-strapped households, Octopus Energy has launched a new fixed-rate energy deal that beats the current Ofgem price cap, potentially saving customers hundreds of pounds a year.
The 'Octopus 1 Year Fixed' tariff is now available to new and existing customers, offering a glimmer of relief amidst the ongoing cost-of-living crisis. This deal effectively undercuts the government's energy price guarantee, making it one of the most competitive offers on the market.
How Much Could You Actually Save?
The numbers speak for themselves. For a typical household using a medium amount of energy, the new fixed tariff offers a significant saving compared to the current rates.
The new deal is set at an average of £1,640 per year for a typical dual-fuel household paying by direct debit. This comes in below the current Ofgem price cap of £1,690, which is set to fall to £1,568 from July 1st but is predicted to rise again later in the year.
Why Fix Your Energy Bills Now?
Fixing your energy rate provides one major advantage: price certainty. While the price cap is falling slightly this summer, experts from Cornwall Insight predict it will jump back up by over 12% in October, pushing the average bill back towards £1,760.
By locking in the new Octopus rate now, customers can protect themselves from this anticipated winter price hike. This kind of financial predictability is invaluable for families trying to budget effectively.
Is This The Right Deal For You?
While the deal is compelling, it's not necessarily for everyone. You should consider:
- Your current energy usage and tariff
- Whether you value price security over potential short-term savings
- Any exit fees on your existing deal (Octopus does not charge exit fees on this tariff)
As with any financial decision, it's crucial to do your own calculations based on your specific energy consumption. Use an Ofgem-approved comparison site to see if you can save.
The Bigger Picture for the UK Energy Market
Octopus's move signals a cautiously optimistic shift in the energy market. After years of extreme volatility and sky-high prices, competition is slowly returning, giving consumers more choice and better deals.
This increased competition is a positive sign that the market is stabilising, though prices remain substantially higher than pre-crisis levels. For millions, every pound saved on essential bills makes a tangible difference.
