I am a former Shell Energy customer. Under a bit of pressure last year I opted for a fixed energy tariff. The time has come to renew and I am faced with a range of other tariffs variable and fixed, I would appreciate hearing others opinions before I make a decision. For example Did I lose or gain last time by having a fixed tariff? Which of the other tariffs on offer are worth considering if any and why?
@billypop I’m always a bit reluctant to advise on the relative benefits of fixed and variable tariffs. There are just too many variables involved, not least of which is the value placed on knowing just what your costs are likely to be barring major changes in usage.
It’s worth remembering that Standard Variable Tariffs (‘SVT’, the ones subject to Ofgem’s price cap) are calculated on the basis of historical data. The prices to be published in a week’s time reflect changes that have taken place in the last few weeks. On the other hand, fixed rates are worked out according to predictions about costs over the fixed-price term, i.e. the next year or more.
You can see the difference as far as OVO is concerned by looking at the Plans page and comparing the prices of one- and two-year plans and the Extended fixes, which currently run for 15 months. The biggest variation I see is in the standing charge; there are increases in the offing to cover things like the cost of upgrades to the transmission grid and the cost of writing off the bad debt of customers who can’t or won’t pay their bills.
It became obvious a year ago that expanding the scope of the Warm Home Discount would require an increase in everyone’s standing charge to cover the cost. I watched the rates of the Extended Fixed tariff reduce little by little until they turned the corner towards the end of February and began to rise again. I was fortunate enough to latch on to its cheapest version, so that’s what I’m still enjoying even though we’ve seen some of the standing charge increases already. We still don’t know what effect the budget’s much-flaunted “£150 off your energy bill” is going to have. Of course, changes in the standing charge affect customers differently: an increase will hit the low-consumption customer harder than his high-usage neighbour, other things being equal.
I know @Chris_OVO’s expecting to see one of my pretty graphics, so I won’t disappoint him. I wanted to illustrate the difference between a fixed rate and the SVT as it applied to me, so here goes (click on the image for a bigger picture):
The ‘Fix’ is the plan called Extended Fixed - 27/02/2025 East Midlands region.
A couple of oddities in the chart: the obvious one is towards the end of December, where a surfeit of Christmas spirit persuaded me to turn the electric heating on 25-31 December - lesson learnt, I think. The other is the unseasonal increase from July to September. This is all attributable to OVO fun and games with both the Power Move Flex and the ‘Two Hours of Free Electricity’ schemes. The costs shown in the chart are only unit rate x consumption + standing charge + VAT, so any rebate earned from the schemes doesn’t show.
The ‘saving’ attributable to the fix is the grey bit at the top of each week’s column, Seen like this, it’s not going to be world-shattering, although it does of course add up over time. I saved almost £30 in 2025, £3.60 of that in Christmas week alone.
The grey saving didn’t change much with last March’s fix, and it almost disappeared in the July quarter - but it picked up with October’s price-cap increase and rose even more in the new year. There’s no guessing what will happen in the next two quarters.
Last, I’d point out that other suppliers may have tariffs - fixed or variable - that suit your own usage pattern better than OVO’s offerings. There’s sadly no easy way to find out which, although comparison sites may help. It’s a question of dusting off the slide rule and applying the reluctant grey cells, I’m afraid.
I’m sorry if you’re even less certain now than before …
The following topics may also be of interest here:
Fixed rate prices will give you the security of knowing how much your energy bills will be. Going fixed or variable is very much a tactical decision. If energy prices go up a fixed rate will leave you without the worry of increased bills. However, if energy prices fall you will not benefit from that change.
I think it might be wiser to wait a couple of months if you’re thinking of changing to a fixed tariff. As the weather warms up, you should find you use a lot less gas on heating, and your bills will start coming down.
My latest bill (Feb-Mar) is £99.90, down from the Jan-Feb Bill of £142.82, and should continue falling, so it wouldn’t make financial sense for me to change to a fixed rate tariff of something like £50 per fuel per month.
Just worth noting your rates are going to be adjusted soon regardless of tariff - OVO has permission from the government to knock off a levy which may see your rates (and bills) drop a little. They’ll let you know what the impact will be once it’s been verified.
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I currently have a variable tariff account with OVO. My account balance is over £400 but my direct debit keeps increasing despite relatively low useage.
I can't really withdraw funds because OVO will just increase my DD as soon as my balance decreases (vicious circle!).
Anyway, if I change to a fixed tariff, will I be able to withdraw all my funds?
Your DD keeps increasing? DD amounts are usually reviewed once a quarter; if you’re on a Simpler Energy plan, the rates have for several years increased once a quarter, so it’s natural for the DD to have to rise as well. Are you seeing DD increases more often than once a quarter?
You say you have a sizeable credit balance. OVO’s billing system updates your account every day, so it makes a lot of difference when you note the balance. It will be lowest the day before your DD is taken and highest the following day.
The DD has in the past been calculated from just a few numbers: the Future Annual Consumption figures, the unit rates and standing charges shown on your account’s Plan page, and the current balance. When the Direct Debit calculator is working properly, you can get a good idea of how healthy your account is.
Fixed-rate plans nowadays are no cheaper than variable ones, and in fact there is most likely a premium to be paid. That probably means the DD will have to increase, of course. Switching tariff won’t make any difference to the amount of refund you can get.
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I’m glad to see Firedog has already stopped by with some helpful advice.
The amount that can be withdrawn, no matter what the tariff is, is based on leaving 1 month’s Direct Debit amount in the account or 3 months’ if you’re doing it yourself via the app or online. You can view more on refunds on the following topic:
Firedog also asked some good questions about how frequent the increases are happening, if they’re happening more often than they should be, it’ll be worth speaking with the Support Team to see if they’re able to advise why it’s increasing so often.
I hope this and Firedog’s advice have been helpful, do let us know if you have any more questions.
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