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Firedog
Super User
FiredogSuper User
Super User
December 15, 2023
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Price cap increases- To fix or not to fix?

  • December 15, 2023
  • 217 replies
  • 5948 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

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    M
    Newcomer
    mozzie55
    Newcomer
    April 9, 2024

    House sharing through the winter.

    When my kids were young and later when they went to school my best friend and I would house share in the winter to save money.

    I would do my housework and then go to her house for the day, the next day she would come to mine. This way we had company for ourselves and our kids and we were only heating one house each day between us. It was fun. 

      Nukecad
      Super User
      NukecadSuper User
      Super User
      April 9, 2024

      That's incredible.

      Not really - because you are not comparing the same things at all.

      Juffus showed the basic 'Simpler Energy' and the '1 year fixed loyalty'.

      You showed '2 year fixed + heating control - Economy 7' and '1 year fixed loyalty - Economy 7'.

      The Heating Control tariff includes extra - A Tado Wireless Smart Thermostat kit, paid for over the 2 years (The cost is added to the Gas Standing Charge).
      https://www.ovoenergy.com/2-year-fixed-heating-control-terms
      Both of yours are Economy 7, do you currently have economy 7?

      I said, Hey - Watts going on.
        Emmanuelle_OVO
        Retired Moderator
        Emmanuelle_OVO
        Retired Moderator
        April 9, 2024

        Those are really helpful and innovative tips @mozzie55, I never thought of the house sharing idea! 😊

        Renewable Energy? Big Fan.
        S
        Rank 2
        samsonluk
        Rank 2
        April 9, 2024

        @Jeffus Are you looking at the wrong tariff information? Your current tariff should be look up from below:

         

        Jeffus
        Rank 20
        Jeffus
        Rank 20
        April 9, 2024

        @Jeffus Are you looking at the wrong tariff information? Your current tariff should be look up from below:

         

         

        Good question @samsonluk 

         

        The plan page you have posted is excluding VAT.

         

        All the figures on the renewal page include VAT

         

        So an easy way of comparing rates on  variable and fixed tarrif is to look on the renewal page. Then everything will include VAT.

        Also:

        The IHD figures also include VAT and standing charges.

        The figures on the usage page don't include VAT or standing charges

        Rates are regional so other posters may well see rates higher or lower than those posted

         

         

         

          Peter E
          Super User
          Peter ESuper User
          Super User
          April 10, 2024

          Whether to stay on the cap or go fixed is a difficult decision because there is no clear distinction between the two at the moment and this is unlikely to change for the foreseeable future. It's worth reading the advice from Martin Lewis which is based on sound principles.

           

          https://www.moneysavingexpert.com/utilities/are-there-any-cheap-fixed-energy-deals-currently-worth-it/

           

          Reducing my yearly fossil fuel usage with an EV (-900 litres petrol), A2AHP (-8,700 kWh gas) and Timed Immersion heater (-1,500 kWh gas)
            Firedog
            Super User
            FiredogSuper UserAuthor
            Super User
            April 10, 2024

            Just to add to your confusion, there was a lengthy discussion here on the question of to fix or not to fix just before the January 2024 price hike. Have a look at it - you may find it interesting.

             

            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. |
              Jeffus
              Rank 20
              Jeffus
              Rank 20
              April 10, 2024

              The 1 year loyalty tariff is worth considering as there are no exit fees if you switch to another ovo fixed tarrif in the future.

              Currently slightly less than the variable tariff.

               

              Firedog
              Super User
              FiredogSuper UserAuthor
              Super User
              April 10, 2024

              The 1 year loyalty tariff is … Currently slightly less than the variable tariff.

               

              Compare with Cornwall’s latest insight:
                

              Electricity   Q324 Forecast  Q424 Forecast  Q125 Forecast   
              Standing Charge (£/day)  0.60 0.61 0.60  
              Per Unit Costs (p/kWh)  22.43 23.81 24.06  
              Gas   Q324 Forecast Q424 Forecast Q125 Forecast  
              Standing Charge (£/day)  0.32 0.33 0.32  
              Per Unit Costs (p/kWh)  5.38 5.61 5.65  
                       

               

              These are average GB figures, so they won’t match your own. It’s the predicted change from quarter to quarter that’s interesting

              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. |
                Emmanuelle_OVO
                Retired Moderator
                Emmanuelle_OVO
                Retired Moderator
                April 11, 2024

                Hey @Crisse2004,

                 

                Some really fantastic, helpful advice from our community members here. If you can, please pop back and let us know what you decide 🙂

                Renewable Energy? Big Fan.
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