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Firedog
Super User
FiredogSuper User
Super User
December 15, 2023
Solved

Price cap increases- To fix or not to fix?

  • December 15, 2023
  • 217 replies
  • 5906 views

Customers on variable tariffs (SVT) are being notified these days of tariff increases from 1 January. At the same time, many are being given the opportunity to switch to a fixed-rate tariff. I am trying to decide whether it would be a good idea to fix, but I’m not sure I have all the information I need. Gas hasn’t been invented yet in my corner of the world, so I’m only interested in electricity tariffs.

Cornwall Insight are a well respected crystal-ball gazer where energy prices are concerned. Their predictions for 2024 show small ups and downs in unit prices, but one startling forecast is for a hike in the standing charge of the order of 15% on 1 April. For a light user like me, this is hugely significant. On SVT, the standing charge would amount to 37% of my bill in January, but by October this would have risen to more than 41%. The fixed rates I’m being offered would keep the standing charge at more or less the current level, so that makes fixing look like a good idea. 

But … we know that Ofgem are considering changes to the way standing charges are calculated and applied. If by some miracle any change were to be implemented before 1 October next, would I miss out on any benefit this might bring? I guess the answer to that is Yes, but that it’s not very likely any change will happen by then. Agree?

And does anyone know the reason for the increase in standing charges predicted for 1 April next? Are we going to be paying for the cost of bailing out Bulb customers?

 

    Best answer by BPLightlog

    Updated on 29/08/25 by Ben_OVO

    The Energy Price Cap, set by Ofgem, is normally changed on 01/01, 01/04, 01/07 and 01/10 each year. The price cap can go up or down and, if you’re on the standard variable tariff (Simpler Energy) then your rates will go up or down to match the price cap change. We offer fixed tariffs for one or two years. If you opt in for a fixed tariff then your rates will be fixed, and protected from price cap changes. If you’re up for renewal, or are currently on the Simpler Energy plan, you can switch to a fixed tariff via your online account or app (see below).

     

     

    I’ve been asked about the question ‘to fix or not to fix’ often in the last few months and I always offer the same answer .. how comfortable are you with the possibility that prices might increase over the next year?

    There are no two ways about it .. it is a gamble. I liken it to taking out insurance (the optional sort) where it’s a calculation as to the possibility of an expense for a loss/damage compared to - for the most part - having financial cover for those things.

    Back in 2021 we fixed our energy rate for 2 years and almost everybody told me that it was at too high a level. Little did I (or anybody else) know about the pending war in Ukraine and the problems with supply from the Russian pipeline.

    This time, despite the outlook, we have not fixed .. although, in effect, our tariff is a constant variable if that makes any sense. All of that is why I’ve invested in solar PV, battery storage, a Ripple community solar park and a small wind generator, so that we have a degree of self/low generation support whatever happens

    217 replies

    BPLightlog
    Super User
    BPLightlogSuper UserSolved
    Super User
    December 15, 2023

    Updated on 29/08/25 by Ben_OVO

    The Energy Price Cap, set by Ofgem, is normally changed on 01/01, 01/04, 01/07 and 01/10 each year. The price cap can go up or down and, if you’re on the standard variable tariff (Simpler Energy) then your rates will go up or down to match the price cap change. We offer fixed tariffs for one or two years. If you opt in for a fixed tariff then your rates will be fixed, and protected from price cap changes. If you’re up for renewal, or are currently on the Simpler Energy plan, you can switch to a fixed tariff via your online account or app (see below).

     

     

    I’ve been asked about the question ‘to fix or not to fix’ often in the last few months and I always offer the same answer .. how comfortable are you with the possibility that prices might increase over the next year?

    There are no two ways about it .. it is a gamble. I liken it to taking out insurance (the optional sort) where it’s a calculation as to the possibility of an expense for a loss/damage compared to - for the most part - having financial cover for those things.

    Back in 2021 we fixed our energy rate for 2 years and almost everybody told me that it was at too high a level. Little did I (or anybody else) know about the pending war in Ukraine and the problems with supply from the Russian pipeline.

    This time, despite the outlook, we have not fixed .. although, in effect, our tariff is a constant variable if that makes any sense. All of that is why I’ve invested in solar PV, battery storage, a Ripple community solar park and a small wind generator, so that we have a degree of self/low generation support whatever happens

    Bring me Sunshine ~ E&E {Solar PV, Battery Storage, Hybrid EV, ASHP and Home Assistant automation}
      juliamc
      Rank 20
      juliamc
      Rank 20
      December 15, 2023

      How’s the wind generator doing? Are you getting much from it? 

        BPLightlog
        Super User
        BPLightlogSuper User
        Super User
        December 15, 2023

        How’s the wind generator doing? Are you getting much from it? 

        Haha - no, not much .. it’s quite small scale as I don’t have the space

        Bring me Sunshine ~ E&E {Solar PV, Battery Storage, Hybrid EV, ASHP and Home Assistant automation}
          Nukecad
          Super User
          NukecadSuper User
          Super User
          December 15, 2023

          I’m 95% sure that I’m not going to fix again just yet, small 5% doubt because the OVO fixed loyalty does look borderline interesting.
          (I need to do a bit more number crunching on that, and get out my crystal ball).
          Edit- I did fix after taking another look at the numbers, time will tell if I made the right decision or not.

          The unit rates are expected to drop in April so I thought I’d look again then, but I hadn’t heard about that possible situation with the SC which may change my thinking.

          I was fixed for a year with SSE on a triple deal, electricity, gas, and broadband.
          But that ended just as the prices started going crazy and the new fixed deals offered at that time were few and seemed too high, so I went on variable tariff for energy. (and put the broadband on BT’s social tariff saving £10 a month over what I had been paying SSE, and £20 over what they wanted for it ongoing).

          I said, Hey - Watts going on.
          T
          Rank 5
          Tricia
          December 15, 2023

          Maths was never my strong point so I hope I did the right thing when I fixed for 1 year a couple of days ago for my own peace of mind. A hike, yes  -  but not too bad. My variable rates

          were: leccy 25.89/55.50, gas 6.75/27.72.

          now: leccy 26.61/55.74, gas 7.05/28.04

          I was lucky in September 2021 when I started a 2 year contract at what now seems incredibly low rates (gas just 3.82 and leccy under 20!) so the variable rate I signed up for  cost more than double my earlier monthly DD! Quite a shock to say the least! 

          Nukecad
          Super User
          NukecadSuper User
          Super User
          December 15, 2023

          Well I’ve done some quick calculations, and like I say it is borderline for me.

          Using the Cornwall Insight predictions then even with the higher SC I’d be paying slightly less for electricity over the next 12 months on SVT that with OVO Fixed Loyalty.
          (I’ve left gas out of things for now).

          But it is very marginal and calculates at only £11 difference over the 12 months, If I use slightly more or slightly less electricity than this year then it could swing either way.
          (Or if the Cornwall predictions are out of course).

          Crystal ball time again.

          So essentially for me it becomes a question of how much do I value having 12 months certainty of tariff?

          I’ll do my calculations again, and for gas as well, but I’m now changing my mind and it’s about 50/50 on whether to take the Fixed Loyalty rates I’ve been offered.

          I said, Hey - Watts going on.
          T
          Rank 5
          Tricia
          December 15, 2023

          Of course  post code plays a part too. Maybe I should have mentioned I'm in Torbay, South Devon. 

          Nukecad
          Super User
          NukecadSuper User
          Super User
          December 15, 2023

          I’m in Cumbria, but whilst there are regional differences in tariffs those differences aren’t that big.

          PS ‘Cornwall Insight’ is a company, they are based in Norwich and AFAIK have nothing to do with the county of Cornwall (or Cumbria).

          I said, Hey - Watts going on.
          Jeffus
          Rank 20
          Jeffus
          Rank 20
          December 15, 2023

          The expected increase in electricity standing charges is primarily due to previous changes to shift some  network enhancement costs from unit rates to standing charges. This meant unit rates were due to fall…

          The orange and green bits increased and will continue to increase.

          Unfortunately unit rates went up due to global events so benefits were invisible to anyone…

          The cost of failing suppliers is nearlly all covered now so this cost on the standing charge is nearly gone now. The SolR above. Bulb may still not cost anything.

          There is a circa £16 one off addition due to come in to cover consumer bad debt. But this is being loaded onto unit rates not standing charges.

          I expect the standing charge review will make some changes but when and how much this will help low users is difficult to know.... For piece of mind a fixed rate is always worth considering for many customers...

          If you have strong views on the standing charges...

          https://www.ofgem.gov.uk/publications/standing-charges-call-input

            Firedog
            Super User
            FiredogSuper UserAuthor
            Super User
            December 15, 2023

            … whilst there are regional differences in tariffs those differences aren’t that big.

             

            ‘Big’ is of course relative. The standing electric charge for a Liverpudlian is 62% higher than for a Londoner (£227 a year compared to £140). Unit rates don’t vary so much, but even so, the average 4-bed Londoner would pay £80 more a year than a similar Yorkshireman (£1219 compared to £1139).
              

              

            … ‘Cornwall Insight’ is a company, they are based in Norwich and AFAIK have nothing to do with the county of Cornwall ...

             

            History of Cornwall Insight

            • 2005
              Cornwall Insight is established and named after its founder Nigel Cornwall. Launched with three employees and based in a holiday cottage in the Norfolk countryside ...

             

            Noel | I have no official status; I'm just a volunteer who comes here to help other customers. My gear: Aclara SGM 1416-B Electricity-only E7 meter; Chameleon IHD3-PPMID-AAA | It may look as if I know what I’m talking about, but don’t let that fool you. |
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