Solved

Recently signed up to a new fixed contract- Will my prices be affected by the Energy Price Guarantee?

  • 12 September 2022
  • 83 replies
  • 1690 views
L
Rank

I have recently signed a new contract for gas and electricity, the new figures are higher than the price cap figures. The new contract starts later this month. Will i be charged the higher new amount after the price cap starts in October or will they reduce the contract to the price cap?

Plus on the app it says people with certain criteria will be able to apply for free electric throws, free boiler service, free smart thermostats. How do i find out if i qualify? 

icon

Best answer by Emmanuelle_OVO 13 September 2022, 17:10

View original

83 replies

Blastoise186
Rank
Userlevel 7
Badge +1

Hiya @LSdevon ,

As far as I’m aware, OVO will adjust your bills automatically when they’re generated, so that if your vanilla rates are above the new Energy Price Guarantee, they’ll be dropped down below it by the billing platform. No action is required on your part to enable this to happen.

Plus on the app it says people with certain criteria will be able to apply for free electric throws, free boiler service, free smart thermostats. How do i find out if i qualify? 

 

Coming Soon! ™

Securing energy by zapping security bugs... For that is The Blastoise Way!
L
Rank

Thank you so much!! Your help is very much appreciated

R
Rank
Userlevel 1

Hiya @LSdevon ,

As far as I’m aware, OVO will adjust your bills automatically when they’re generated, so that if your vanilla rates are above the new Energy Price Guarantee, they’ll be dropped down below it by the billing platform. No action is required on your part to enable this to happen.

I started a new contract (at 60p/kWh electric) in late August - should I be ringing to cancel it or should I sit tight?

Blastoise186
Rank
Userlevel 7
Badge +1

Hiya @LSdevon ,

As far as I’m aware, OVO will adjust your bills automatically when they’re generated, so that if your vanilla rates are above the new Energy Price Guarantee, they’ll be dropped down below it by the billing platform. No action is required on your part to enable this to happen.

I started a new contract (at 60p/kWh electric) in late August - should I be ringing to cancel it or should I sit tight?

Sit tight for now @Random . OVO will automatically adjust your bills down if the rates are above the new Energy Price Guarantee, regardless of what tariff you’re on.

Securing energy by zapping security bugs... For that is The Blastoise Way!
R
Rank
Userlevel 1

That depends on whether they’re adjusting it down to meet the variable rate cap, or providing the 17p/kWh discount the government have mentioned - which would still put me ~10p/kWh above the cap.

Hope they release what they’re doing soon.

Blastoise186
Rank
Userlevel 7
Badge +1

From what I’ve heard, it’s likely that the same cap will apply to everyone, but please don’t rely on this.

What I can say with absolute confidence though is that under the new plans, the legacy Ofgem Default Tariff Cap (which is the “legacy” price cap that everyone knows about) will be terminated on the 1st October 2022 sometime around midnight.

Securing energy by zapping security bugs... For that is The Blastoise Way!
Jeffus
Rank
Userlevel 7
Badge +2

That depends on whether they’re adjusting it down to meet the variable rate cap, or providing the 17p/kWh discount the government have mentioned - which would still put me ~10p/kWh above the cap.

Hope they release what they’re doing soon.

The idea of the discount off fixed price plans is to give the same level of discount as customers on variable rate plans.

So i think you are correct based on what the government have said so far in the policy paper on the government website. Customers on very high fixed rate plans like you may have to decide what to do unless the government tweaks the policy. It is not clear how many OVO customers will be in a similar situation. Some suppliers are already highlighting it may be best for some customers to switch to their variable plan. 

For customers with some suppliers, it won't be an issue as some suppliers allow fee free switching between plans.

OVO normally charge an exit fee for fixed plans, typically £30 per fuel, but it does vary.

You may be best waiting to see what OVO offer before making any decision. I have my doubts if OVO will waive exit fees once they issue their update, but you never know.

Emmanuelle_OVO
Rank
Userlevel 7

Updated on 28/09/23 by Emmanuelle_OVO: 

 

For up to date information about the current price cap please head to our website. Or check out this helpful FAQ to find out more about how this may impact you and what support is available:

 

 

Energy Price Guarantee (EPG) and The Price Cap July 1st 2023

 

Ofgem’s energy price cap limits what you pay for gas or electricity. Here’s out how it works – and how it affects your prices.

 

What is the Energy Price Guarantee?

 

The Government’s Energy Price Guarantee (EPG) was introduced in October 2022 to help households with rising energy costs. It’s a discount on the unit rate of gas and electricity and is on top of the price cap. The EPG was previously set at £2,500 for a typical household bill. From 1 July 2023 this will change to £3,000, which is above the new price cap.

 

The Price Cap

 

Ofgem have announced that the new price cap will be £2,074 for a typical household from 1 July until 30 September 2023.

 

What this means for customers who pay monthly

 

If you're on a variable rate plan

 

With the new price cap, customers on variable rate plans will pay a lower unit rate for their energy. Your actual bills will still depend on how much energy your home uses.

 

As the Energy Price Guarantee (EPG) level is higher than the new price cap, it won't have an impact on what you pay if you're on a variable rate plan, but it will remain in place to protect you from future price increases.

 

If you're on a fixed rate plan

 

The price cap doesn't affect prices for fixed rate plans. Even though the EPG level has gone up to £3,000 from 1 July 2023, if you're on a fixed rate plan your prices won't change. That's because we're keeping your prices as they are for the length of your contract to protect you from this price increase.

 

What this means for Pay As You Go customers

 

Pay As You Go prices are variable – these will be set by the new price cap on 1 July 2023. This means your prices are going down.

 

Gas

 

Customers will receive an additional discount on their gas unit rate through the Energy Price Guarantee (EPG) so that most customers will pay less than Pay Monthly customers.

 

This discount will be reviewed every 3 months. You don't need to apply, and there is no need to contact us – the discount is applied automatically.

 

Electricity

 

Electricity prices on Pay As You Go mean that most customers will already pay less than the equivalent for Pay Monthly.

 

You can also check out more information on the Price Cap set by Ofgem, here.​​​​​​

 

 

Hi @LSdevon,

 

Welcome to the OVO Online Community. 

 

Great to see our community members giving you some tip-top advice here. 

 

The prices you’re paying for your energy may be changing in October. For all the up to date advice, see this page dedicated to the Energy Price Guarantee. We’ll keep that page updated with any changes as and when.

 

If you pay by Direct Debit, we’d recommend you leave this unchanged until any price changes have been made in October. That way you know you’re paying the right amount. 

 

If you don’t have a smart meter that sends us your readings remotely every day, we’d recommend you submit a manual meter reading this week or next via your online account.  

 

Support available for customers who may be struggling with their bills

 

Customer support package and where to apply. 

What to do if I can’t afford my energy bills? 

Renewable Energy? Big Fan.
nealmurphy
Rank
Userlevel 7
Badge +2

Word on the street is that if your fixed rate is higher than the price guarantee rate, you will be able to move onto the guaranteed variable with no exit penalties.

C
Rank
Userlevel 3

As it now seems a lot of fixed deals (including mine) are going to cost more than the standard variable rate with the new price cap, I’m thinking of cancelling my fix and paying the cancellation penalty as subject to confirmation of the actual unit rates, I think I will pay less in the longer term, assuming the cap will remain as long as my fixed deal currently does!

Anybody else considering the same and have any thoughts on a reason not to cancel a fixed deal?

juliamc
Rank
Userlevel 7
Badge +2

Have a look at the answer from Tim on this thread.

If you’re still in the 14 day cooling off period you shouldn’t get charged an exit fee if you cancel. If it’s been running longer than that it’s probably worth hanging on to see what the official OVO line is.

Emmanuelle_OVO
Rank
Userlevel 7

Hey @croninsfc,

 

Welcome to the OVO Online Community.

 

The Energy Price Guarantee was announced very recently and we’re working through the finer details of it. We don’t yet have all the information about what this means for our customers, but as soon as we do we can update advice in the Forum. 

 

Customers can still choose to move from an existing fixed tariff to a standard variable tariff. 

 

As we work through the practical application of the scheme, given the short time scale since the announcement, we are unable to say with certainty whether changing your tariff at this point will be beneficial to you.  

 

No exit fee will be applied to you if you do decide to change from a fixed tariff to a variable. 

 

Here is a useful guide we’ve put together about the Price Cap Increases and what OVO is doing to support it’s customers. 

 

Hope this helps. 

 

 

 
Renewable Energy? Big Fan.
L
Rank
Userlevel 4

Hi, 

Has there been any updates as to when we will be receiving our new energy plan.

 

Blastoise186
Rank
Userlevel 7
Badge +1

Hi @Lucky2 ,

Not just yet! OVO is currently working through the details and there’ll be an announcement as soon as they’re ready.

Securing energy by zapping security bugs... For that is The Blastoise Way!
Jeffus
Rank
Userlevel 7
Badge +2

Hi @Lucky2 

If you are on the Simpler Energy plan, use gas and electric, and pay by direct debit, you could try using this calculator

https://www.moneysavingexpert.com/utilities/what-are-the-price-cap-unit-rates-/#tool

The regional rates have now been uploaded into the calculator for the Energy Price Guarantee recently announced by the government. But it will only work for dual fuel, direct debit customers. Not for example for Economy 7. The Ofgem price cap rates for 1st October no longer apply. 

I very much doubt OVO will undercut the Energy Price Guarantee rates so this should be a good proxy.

You will need to enter your annual gas and electricity usage.

You can find what OVO thinks this will be on this page on the website not the app

https://account.ovoenergy.com/plan

These are the kWh figures that ultimately drive your direct debit estimates on OVO. 

Jeffus
Rank
Userlevel 7
Badge +2

Hey @croninsfc,

 

Welcome to the OVO Online Community.

 

The Energy Price Guarantee was announced very recently and we’re working through the finer details of it. We don’t yet have all the information about what this means for our customers, but as soon as we do we can update advice in the Forum. 

 

Customers can still choose to move from an existing fixed tariff to a standard variable tariff. 

 

As we work through the practical application of the scheme, given the short time scale since the announcement, we are unable to say with certainty whether changing your tariff at this point will be beneficial to you.  

 

No exit fee will be applied to you if you do decide to change from a fixed tariff to a variable. 

 

Here is a useful guide we’ve put together about the Price Cap Increases and what OVO is doing to support it’s customers. 

 

Hope this helps. 

 

 

 

@Emmanuelle_OVO

Can i just confirm. 

So anyone can switch from an OVO fixed rate to the Energy Price Guarantee without OVO charging a fee, even if they are outside the 14 day cooling off period? 

J
Rank
Userlevel 4

I’m on a fixed rate, as of five months ago .But I think the new Energy rate fix in October 1st is slightly cheaper . I take it I will be switched if there is a difference.

C
Rank
Userlevel 3
Badge +1

I would be surprised if its cheaper now Where did you hear they would be cheaper?

J
Rank
Userlevel 4

I looked at the new kWh ratings on the Martin Lewis video . And the electric rating is slightly lower.

C
Rank
Userlevel 3
Badge +1

not sure id trust him. OVO and others have not released any numbers yet. I did mine 5 months ago ish & it was 35p. August numbers are around 70p for a fixed rate. Id be very surprised if the drop below 50p in October 

J
Rank
Userlevel 4

 

C
Rank
Userlevel 3
Badge +1

Looking at those numbers they look like the variable rates not fixed ones. Fixed rates of 51.89p havent been offered for months 

nealmurphy
Rank
Userlevel 7
Badge +2

Looking at those numbers they look like the variable rates not fixed ones. Fixed rates of 51.89p havent been offered for months 

But if the fixed tariff started in March then unit rates would be around 40p/kWh.

Still waiting for final detail as to how the reductions will apply to fixed rates. As it’s written in the information sheet fixed tariffs are reduced by 17p/kWh. But I expect this is not what the government actually meant and it may be ‘up to’ 17p/kWh, perhaps being lowered to match the cap according to some rumours.

Probably worth just holding on a few more days to see what the rates become.

nealmurphy
Rank
Userlevel 7
Badge +2

So anyone can switch from an OVO fixed rate to the Energy Price Guarantee without OVO charging a fee, even if they are outside the 14 day cooling off period? 

 

Some suppliers are restricting this fee free transfer to actions before a certain date. Martin Lewis mentioned November 15th for some suppliers. It would be good to get confirmation from OVO on how long the fee free period is for.

Emmanuelle_OVO
Rank
Userlevel 7

Hey @Jeffus,

 

Thanks for your question.

 

To clarify currently customers won’t be charged exit fees if they want to more from an existing fixed to a variable tariff with OVO.

 

To answer @nealmurphy I’m not sure if this will change in the future.

 

If a customer calls Support to discuss this they will be given more information but the premise of it is we’re currently working through the practical application of the recently announced energy price guarantee and we’re unable to say with certainty at this point whether changing from a fixed rate to a variable will be beneficial.

 

Hope this makes it more clear.  

 

 

Renewable Energy? Big Fan.

Reply


Terms & ConditionsCookie settings