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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
  • 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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    S
    Rank 2
    samsonluk
    Rank 2
    May 16, 2024

    It's stated that I wouldn't incur a termination fee if I switch to another OVO fixed tariff. 

     

    OK, thanks. I’m intrigued, because mine - back in December - didn’t look like that. I thought this was a recent change, but your evidence suggests otherwise. When is that email dated?

    It's 15th April 2024.

      Firedog
      Super User
      FiredogSuper UserAuthor
      Super User
      May 16, 2024

      When is that email dated?

      It's 15th April 2024.
       

      That would explain why you saw the new T&Cs, then. Judging by that, you should be good to go, but as Blastoise says, you’ll have to call Support to switch if the option isn’t there online. It will be interesting to hear how you fare. 

       

      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. |
        Firedog
        Super User
        FiredogSuper UserAuthor
        Super User
        July 2, 2024

        Six months on, and we have a price cap decrease.

        I elected to fix back in May, grabbing the 1-year fixed loyalty plan then on offer, largely because it had a lower standing charge than others, but also taking into account Cornwall’s prediction of increases in unit rates to come in October and beyond.

        I can now compare how I’m faring today with other possibilities. Taking Ofgem’s all-electric low-user national average consumption figure of 1800 kWh/year, I see that I’m not doing too badly: £5 up on the year!
          

        Using rates for East Midlands region, for a multi-rate meter and paying by Direct Debit. The first three rows show results for the average household, the next four for my actual consumption over the past year. The red blob indicates my current tariff.

        There’s clearly not much in it. For the average household, the results for the May plans are within £1 of each other. The only factor working to my advantage is that low usage emphasises the part played by the standing charge.

         

        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. |
          Firedog
          Super User
          FiredogSuper UserAuthor
          Super User
          August 20, 2024

          … taking into account Cornwall’s prediction of increases in unit rates to come in October and beyond.

           

          In case anyone is still watching this thread:

          • Ofgem’s watch window for the 2024Q3 price cap has now closed. The outcome won’t be published until later, but meanwhile Cornwall have done their sums and come up with their prediction: Cornwall Insight release final forecast for October price cap. It’s pretty close to what they’ve been saying for months.
          • OVO has recently (19 August) published new fixed-rate tariffs that look to beat the price cap until at least next Spring. It’s worth checking before they go away again: Our prices | OVO Energy 

           

          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. |
            T
            Rank 5
            Tricia
            August 20, 2024

            Thanks for that Firedog! I've just signed up for the new one year loyalty fixed plan - with no  exit fees from my prior plan which would have ended at the beginning of December. I like peace of mind so whatever happens to the price cap won't affect me until next July and the new tariff rates work out lower for me right now,  especially for electricity which is lower by more than 5p per unit! 

             

             

             

            tariff 

              A
              Rank 4
              azam216
              Rank 4
              August 23, 2024

               

              ^ hey guys, reopening this thread to ask if its worth fixing now since we know that the price is going up in october?

              Blastoise186
              Super User
              Blastoise186Super User
              Super User
              August 23, 2024

              Absolutely - lock in the current rates and you’ll dodge the winter price rises.

              Securing energy by zapping security bugs... For that is The Blastoise Way! Remember, I'm just like you - AI Powered Evil Geniuses aren't Staff!
              A
              Rank 4
              azam216
              Rank 4
              August 23, 2024

              Absolutely - lock in the current rates and you’ll dodge the winter price rises.

              thank you for your reply, i hope others will reply and i can make my decision depending on the majority.

               

              1. but have you fixed for one year or two years?
              2. fixing for two years seems expensive from what i checked, would you agree?
              Blastoise186
              Super User
              Blastoise186Super User
              Super User
              August 23, 2024

              I always fix for two years. Let’s just say I completely dodged ALL of the price chaos during the pandemic… By locking in a two year renewal deal in August 2021 to start in October 2021, all I had to do was ride the storm. :)

              Securing energy by zapping security bugs... For that is The Blastoise Way! Remember, I'm just like you - AI Powered Evil Geniuses aren't Staff!
                A
                Rank 4
                azam216
                Rank 4
                August 25, 2024

                anyone else fixing?

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