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250% price rise on fixed plans - Why are prices still going up?

  • 16 December 2021
  • 15 replies
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I expected a steep rise in my dual fuel fixed tariff because of global gas prices.  Someone was complaining on a thread now closed about a 60% rise, but mine is 4 times as high.  Surely a mistake.  Who can I talk to?  Help please.

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Best answer by Jess_OVO 17 December 2021, 11:57

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Hiya @Eggcentric !

Hmm… That definitely doesn’t sound right. If you decide not to renew though, you’ll automatically roll onto the variable rate Simpler Energy tariff which probably won’t be any more expensive than your existing one for now.

If you think there’s a problem though, feel free to chat with the Support Team about this. Going in by phone is probably best as OVO needs verbal consent to make contract related changes.

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It may well be right.... 

My current unit rates inc vat are

Elec 16.065p

Gas 2.8875p

Someone renewing now may well be on rates lower than this.

My fixed rate hasn't run out yet, but if it had the 1 year rates for my post code when doing a search on the ovo website are:

Elec 36.72p

Gas 9.73p

Of course there may be special rates for existing members for fixed rates. 

I think rolling onto the standard variable rate is worth serious consideration.

 

Userlevel 7

Just wanted to step in on this point, as unfortunately due to the continued increase to wholesale energy costs the fixed plans available are priced to reflect this. We’ve covered this in more detail on our energy market conditions FAQs and blog.

 

As the variable rates are protected by Ofgem's variable price cap the Simpler plan is currently the cheapest available tariff, however it's worth considering that prices on this plan are not fixed so this may not be the case in the coming year.

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This isn't meant to be advice just some of my personal thoughts just building on my previous post and the good post from Jess.

The current price cap rates vary a bit based on region, how you pay etc. For direct debit customers the price cap is around

21p electric

4p gas

You would pay this rate until 1st April 2022 until the price cap is revised. OVO will be able to tell you the exact rates for you.

So you would benefit from about 3 months on the much lower price cap if you chose that option rather than the current higher ovo fixed rates on offer. 

Of course we don't know what will happen going forward, but i think it is fair to say there has been no one in the press so far suggesting the next price cap will go as high as the current ovo advertised fixed rate. Of course they may all be wrong…

If you do want to go for a fixed tariff i strongly suggest you check other providers as well in case anyone is offering lower fixed rates, although many providers are discouraging switching. Many providers are openly advising new customers to stay with their current supplier on the ofgem price cap rate. For example this is what Octopus say on their website:

 

"If your fixed term is coming to an end, don't choose a new tariff or switch supplier.

Instead, let your supplier automatically move you to their default tariff, so your prices are protected by the Government's Energy Price Cap." 

 

We should know the new price cap around 5th Feb 2022 based on previous years. 

Ofgem are still working out how the price cap mechanism itself needs to change, not just the rates. There are various options they are considering including changing the frequency of reviews from 6 months to 3 months. 

 

 

 

 

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Just a reminder @Eggcentric  that if you have just signed up for a new Fixed-Price tariff, you can change this without penalty. Under the Financial Services Act you have a 14-day ‘cooling-off period’ during which you can change your mind.

That would leave you on the ‘standard variable rate’ which OVO call the Simpler Plan.

You can then do as @Jeffus  suggests, and watch what Ofgem announces concerning  the prices cap in February.

Grateful for all your responses.  Sorry I didn’t reply earlier but needed new hard drive.

Have talked to support team (twice) but got nothing.  Seems I had a good rate this past year - electric 7194kw, gas 24215kw for £1754.

New fix elect unit 28 (stand 26) £2280 and gas 7.7 (stand 21) £2088. Total £4368,  Ouch.

Standard variable: elect 19.9 (stand 22.9) est 7750, gas  3.8 (stand 24.9) est 26050.  Cost 2850.   (Told extra kwh is because December high.)  Think I should take this and review March 1 (they say) or maybe earlier (Feb 5)?

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Grateful for all your responses.  Sorry I didn’t reply earlier but needed new hard drive.

Have talked to support team (twice) but got nothing.  Seems I had a good rate this past year - electric 7194kw, gas 24215kw for £1754.

New fix elect unit 28 (stand 26) £2280 and gas 7.7 (stand 21) £2088. Total £4368,  Ouch.

Standard variable: elect 19.9 (stand 22.9) est 7750, gas  3.8 (stand 24.9) est 26050.  Cost 2850.   (Told extra kwh is because December high.)  Think I should take this and review March 1 (they say) or maybe earlier (Feb 5)?

Personally i would take the calculated risk and go onto the variable rate and make use of the lower rates now and if necessary all the way to the 1st April when the cap will change. You can switch at any time to a fixed plan with no exit fees. 

Just keep an eye on what happens with fixed rate offers and any news from Ofgem on the price cap etc. Fixed rate offers are changing regularly. 

Ofgem usually announce the new price cap around 5th Feb but we are in uncharted territory. Perhaps OVO know something different or are planning something for 1st March. There is no guarantee OVO will offer the cheapest fixed rate.... 

Your gas and electric usage is pretty high based on the industry quoted typical rates. Perhaps there is a good reason for this (e.g. an electric car, large family) . Perhaps that is something you could work on. 

Gas

Low user 8,000 kWh

Medium user 12,000 kWh

High user 17,000 kWh

 

Electric 

Low user 1,800 kWh

Medium user 2,900 kWh

High user 4,300 kWh

 

Been with Ovo since 2018, no complaints whatsover compared to the poor efforts BG, Scottish Power etc make towards customer service.

However my fixed price deal ends in the new year and the best offer ive been given is a 113% increase on electricity cost and 189% increase on gas when the eggheads say the increase should be 30% or thereabouts.

 

I also dont like the fact you are lead to the fixed price increase and have to look for the variable.

 

Advice please

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Hi,

The variable rate deal should be in your renewal options on MyOVO, but if you can’t see it for some reason, please let the Support Team know and they’ll help you out with that - and also fix the system if needed.

If you don’t do anything, you’ll automatically roll over to the variable rate deal anyway, so if that’s what you’d like to do, simply leave things alone and your account will be moved to the Simpler Energy tariff once the fixed deal expires. You’ll be able to renew properly at anytime - and you’ll probably want to do so before March 2022.

It’s also worth noting that there’s no single price for the entire country, some areas are being hit harder than others so it sounds like you’re in one of those areas.

Userlevel 7

Hi @limpetlad and Welcome to the OVO online community,

 

Unfortunately due to the continued increase to wholesale energy costs the fixed plans available are priced to reflect this. We’ve covered this in more detail on our energy market conditions FAQs and blog.

 

As our community volunteer, @Blastoise186, has mentioned if you choose not to fix in to a plan before the end of your contract, you will be rolled onto our Simpler Energy plan which is protected by OFGEM’s variable price cap. There’s more advice on what might be your best option in the best answer above.

 

 

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There’s another related thread on this question of renewal with high wholesale energy prices that you might find is worth a look, @Eggcentric:

 

 

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There’s another related thread on this question of renewal with high wholesale energy prices that you might find is worth a look, @Eggcentric:

 

 

Good to link to that thread. Shows how much has changed so quickly. Back then i personally would have gone with the fixed rate. 

The thread starts off with a 3 year fixed rate offer of 25.41p for  electricity.

If i look at the ovo fixed rate deals for my postcode today the fixed rate offer is 61.96p for electricity for 1 year.

I wonder how many people are signing up for fixed rates at 61.96p? 

I currently pay £70 a month for electricity and gas. This usually leaves me in credit overall (i currently have about 80 on my ovo account)

 

My one year fixed rate has come to an end now and I have been put on a variable tariff. I looked at the fixed rate offers and the cheapest(!) is a one year 'loyalty' offer of an estimated £182 a month.

 

I simply cannot afford this. Have energy prices really tripled in price in the past year????? 

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Hi @Jmc133 , Welcome to the OVO Forum.

I’m afraid so. All sorts of events over the last year has seriously squeezed the market hard and the cheap prices probably won’t be available again for a while. The variable rate Simpler Energy tariff is affected by the Ofgem Default Tariff Cap however, meaning that particular tariff cannot be any higher than the current cap. It’s currently the cheapest option OVO can offer at the moment - but this might change in April when the price cap gets reviewed again. At the moment, it’s causing pretty much all suppliers to lose money as the current cap is below cost price.

Fixed rate tariffs are not affected by any price caps however, which means suppliers are able to set the rates at a level which generates at least some reasonable profit margin.

Your best bet might be to ride the storm on variable rate for now and go from there.

It sounds like you might qualify for the Warm Home Discount though, which will boost your energy credit by £140 if accepted. You can apply for it via https://www.ovoenergy.com/warm-home-discount but applications close soon.

Userlevel 7

Hi @Jmc133 

 

Just wanted to pop in to add to the great advice our community volunteer, @Blastoise186 has already given to those worried about their rising energy costs this winter. As we mentioned in the realted thread above, unfortunately due to the continued increase to wholesale energy costs the fixed plans available are priced to reflect this. There’s more details on the current energy market conditions on our blog and the extra support you might find helpful on our FAQs:

 

I’m worried about paying my bills this winter, what can I do?

 

Our team is specially trained to help anyone worried about paying their bills this winter. There are lots of ways we can help, so do call us if you’re struggling. The Ofgem website outlines helpful resources too. And the following organisations offer brilliant support if you need help with energy-efficiency and bills. 

 

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