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Firedog
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FiredogSuper User
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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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    Abby_OVO
    Community Manager
    Abby_OVO
    Community Manager
    May 13, 2024

    Hey @Firedog 

     

    @ChristopherS_OVO

     et al: are there plans afoot to review and update help articles like this? 
    Changing to another OVO plan | OVO Energy 

     

    Thanks for flagging this, we’ve raised this now to be updated. 

     

    Thanks again for flagging this.

    Currently Playing: She's Electric
      Nukecad
      Super User
      NukecadSuper User
      Super User
      May 14, 2024

      I have been looking some more into this early Plan switching and Exit Fees question.

      Two days ago I posted this:

       

       

      However - I’ve checked the email that I got when fixing to my 1-year Fixed Loyalty tariff back in December.
      I clicked the link in that email to the T&Cs and was taken to a version with this:

      Even though they are both headed as “1 Year Fixed Loyalty Terms” you can see that they are clearly different.

      The respective webpages are:
      https://www.ovoenergy.com/1-year-fixed-loyalty-terms
      https://www.ovoenergy.com/1-year-fixed-loyalty-terms/v2

      The earlier version (the one that I signed up to) does not allow switching to another OVO fixed tariff plan without the Exit Fee(s) becoming payable.
      The newer version clearly does allow it, and has had an extra line added to say so. (The wording “your supplier or plan” has also been altered accordingly.

      The moral being to always check exactly what the terms that you signed up to are.
      Generally you are bound by the terms & conditions in force when you sign.

      (Whether in this case OVO would strictly enforce that or not is another question. I suspect that they would otherwise why leave the older version in place?)

      I said, Hey - Watts going on.
      S
      Rank 2
      samsonluk
      Rank 2
      May 14, 2024

      Am I correct that OVO is already offering this? There are no exit fees if you switch to another upcoming OVO fixed tariff, right?

      My original email link to v2 as shown below and that's why I expect they are offering without exit fees.

       

      Chris_OVO
      Community Manager
      Chris_OVO
      Community Manager
      May 15, 2024

      The principle still applies as far as I’m aware, though: simply put, unless you’re within 7 weeks of the end of the contract, any plan downgrade (e.g. 2-year fixed > 1-year fixed, fixed > variable) triggers an exit fee, but upgrades don’t.

       

      Which still leaves the question about changing mid-term from a 1 Year Fixed to a newer 1 Year Fixed?

      Although the current Fixed Loyalty T&Cs that I screenshotted above do suggest that no exit fee applies as long as you are already on a Fixed Loyalty plan and are ‘renewing’ to any other OVO fixed plan is that correct, and is it also correct for all current fixed plans?

      @ChristopherS_OVO any chance that you could get that clarified as well?
      The current guidance seems vague - and contradictory in places.

      Hey @Nukecad,

       

      “Tariff hopping” all depends on the tariff that you are on and the one you’re moving to, as both will have slightly different terms and conditions. For example, in the screenshots you sent us, the fees are £75 per fuel, but this would be mainly for those on fixed tariffs who are thinking of switching suppliers. If you’re currently on a one-year fixed and move to another one-year fixed, the fee could be £30 per fuel or £0 depending on factors such as the length left in the contract, etc. Our Support Team has a tool to determine whether exit fees apply. 

       

      @Abby_OVO has submitted the request to get the “Changing to another OVO plan” page updated with more up-to-date plan examples which will help making things easier to read. 

       

      (Whether in this case OVO would strictly enforce that or not is another question. I suspect that they would otherwise why leave the older version in place?)

       

      You’re right that, in some instances, we wouldn’t enforce exit fees. I’d like to think common sense would prevail in these scenarios. We’ve all fallen victim to the “available to new customers only” marketing tactic, so why wouldn’t we try to help out loyal customers? 

       

      I hope this helps 🙂

       

      Renewable energy jokes never get old.
        Jeffus
        Rank 20
        Jeffus
        Rank 20
        May 15, 2024

        Am I correct that OVO is already offering this? There are no exit fees if you switch to another upcoming OVO fixed tariff, right?

        My original email link to v2 as shown below and that's why I expect they are offering without exit fees.

         

        Yep

        Still offering zero exit fees for me on a switch to another loyalty tariff

        It has been there for ages for me.

        Am already on a fixed loyalty tariff with no exit fees if  switch to a new fixed tarrif with ovo.

        It is a shame the plan page my ovo account only contains a cut down version of the exit fees and doesn't detail it. I would say that is a bug personally. It would be better if the plan page linked to the actual terms and conditions for the specific plan.

        https://www.ovoenergy.com/1-year-fixed-loyalty-terms/v2

        It is a bit of a mess unfortunately

         

        Jeffus
        Rank 20
        Jeffus
        Rank 20
        May 15, 2024

        The principle still applies as far as I’m aware, though: simply put, unless you’re within 7 weeks of the end of the contract, any plan downgrade (e.g. 2-year fixed > 1-year fixed, fixed > variable) triggers an exit fee, but upgrades don’t.

         

        Which still leaves the question about changing mid-term from a 1 Year Fixed to a newer 1 Year Fixed?

        Although the current Fixed Loyalty T&Cs that I screenshotted above do suggest that no exit fee applies as long as you are already on a Fixed Loyalty plan and are ‘renewing’ to any other OVO fixed plan is that correct, and is it also correct for all current fixed plans?

        @ChristopherS_OVO any chance that you could get that clarified as well?
        The current guidance seems vague - and contradictory in places.

        Hey @Nukecad,

         

        “Tariff hopping” all depends on the tariff that you are on and the one you’re moving to, as both will have slightly different terms and conditions. For example, in the screenshots you sent us, the fees are £75 per fuel, but this would be mainly for those on fixed tariffs who are thinking of switching suppliers. If you’re currently on a one-year fixed and move to another one-year fixed, the fee could be £30 per fuel or £0 depending on factors such as the length left in the contract, etc. Our Support Team has a tool to determine whether exit fees apply. 

         

        @Abby_OVO has submitted the request to get the “Changing to another OVO plan” page updated with more up-to-date plan examples which will help making things easier to read. 

         

        (Whether in this case OVO would strictly enforce that or not is another question. I suspect that they would otherwise why leave the older version in place?)

         

        You’re right that, in some instances, we wouldn’t enforce exit fees. I’d like to think common sense would prevail in these scenarios. We’ve all fallen victim to the “available to new customers only” marketing tactic, so why wouldn’t we try to help out loyal customers? 

         

        I hope this helps 🙂

         

        Not really. Am not trying to be awkward 

        It would be better if the plan page clearly stated the exit fees.

        Else customers don't know what they don't know.

        Expecting them to contact customer services.…

        Blimey I thought we were trying to make things more self service 

        I would call this a bug personally 

          Nukecad
          Super User
          NukecadSuper User
          Super User
          May 15, 2024

          Thanks for that clarification @ChristopherS_OVO , it is helpful for me.

          I do like the distinction between "Tariff Hopping" within OVO and "Switching" to another supplier, using those makes it clearer to understand which is being talked about.

          I had noticed that the T&C's say "we may apply" which is not the same as "we shall apply", and so leaves OVO some discretion on whether to charge an Early Exit Fee or not.

          So if the 'Early Exit Fee tool' is only available to Support then a customer considering 'tariff hopping' would have to ring support to check what fee might apply and then decide if it is a move that they want to make?
          (Other than actually 'hopping' and seeing what happens of course).

          PS. I personally don't regard 'tariff hopping' as falling into the same category as “available to new customers only” - because you are not starting from the same place as a new customer - in a tariff hop you had already signed for a fixed tariff that was supposed to be for a set term.

           

          I said, Hey - Watts going on.
            Firedog
            Super User
            FiredogSuper UserAuthor
            Super User
            May 15, 2024

            It looks like this is all a bit new, so perhaps the change from Exit fee: to Exit fee if you change supplier: for new 1-year fixed rate plans hasn’t quite percolated to all corners of the site. I can imagine that it doesn’t apply to 2-year fixes. 

            Meanwhile, I’m happy so far with my new 1-year fix, especially since the standing charge is so much lower (£190 instead of £205). I just hope Ofgem don’t get round to reforming it before May 2025 …

             

            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. |
            Nukecad
            Super User
            NukecadSuper User
            Super User
            May 15, 2024

            Oops! I seem to have a bigger issue just at the moment.

            I just logged into my account to get my usage figures from yesterday for my Power Move calculations, only to be greeted by this:

             

            Whilst I had been looking at the quotes page I didn’t click the button to sign up for a new tariff, at least I’m 99.99% sure that I didn’t.
            I certainly didn’t submit any meter readings like it is saying there, and I’m already on supply, not 3 days from now.

            It’s interesting that it does say it’s a switch and not a tariff change, it’s also interesting that those dates are in the future.
            The last line there suggests that they are treating this as a new supply to a property that they are not already supplying.

            I guess that I need to ring support and find out what is going on.

            I said, Hey - Watts going on.
            Emmanuelle_OVO
            Retired Moderator
            Emmanuelle_OVO
            Retired Moderator
            May 15, 2024

            I’d give support a call, just to make sure this isn’t an erroneous transfer. 

             

            Keep us posted!

            Renewable Energy? Big Fan.
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