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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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    Firedog
    Super User
    FiredogSuper UserAuthor
    Super User
    December 19, 2023

    I have now decided to fix for the next 12 months at the Fixed Loyalty rates.

     

     

    Me too. I went ahead and did it, but found to my alarm that I had apparently arranged to move out of my house and back in again the same day. OK, if that’s how it works - but then I found that this involved closing my existing account and opening a new one with no history and (presumably) none of the benefits I’d accrued. This isn’t what I signed up for, so I tried to get the change reversed. Not possible online, telephone only, they said. Two anxious days of waiting for phone lines to open again ensued, but I think we managed it today.

    I explained that the tariff I wanted to change to wasn’t available on my renewal page. One of the agents I chatted with told me to look at the Home page, which I eventually managed to find at www.ovoenergy.com and not behind the big Home button. There it was, but that’s where the move out/move in/close account/open account circus started. So, advice to those about to fix: avoid the Home page and work only from the Renewals page.

     

    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
    December 19, 2023

    @Firedog @Nukecad did you consider the 2 year fix?

    Firedog
    Super User
    FiredogSuper UserAuthor
    Super User
    December 19, 2023

    … did you consider the 2 year fix?

     

    Yes, but I chickened out. Anything can happen over the next year, and probably will, so the £95 exit fee looks fairly ominous should prices in general fall. I also expect some sort of easing of the standing charge burden for light users like me to be at least in the offing a year hence.

    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
    December 19, 2023

    @Jeffus I had looked at it but the rates were higher than the Fixed Loyalty plan rates that I had beeen offered.

    However just looking again online the Fixed Loyalty rates have changed/increased from what I was originally offered.

    I wasn’t aware that an offered ‘fixed’ plan could change rates like that, but thinking about it I suppose it does make sense and that it’s only fixed once you actually sign up.
    Time to recalculate.

    Even so I think that in the current climate with tarifs 2 years is a bit too long to fix.

    I said, Hey - Watts going on.
    Jeffus
    Rank 20
    Jeffus
    Rank 20
    December 19, 2023

    @JeffusI had looked at it but the rates were higher than the Fixed Loyalty plan rates that I had beeen offered.

    However just looking again online the Fixed Loyalty rates have changed/increased from what I was originally offered.

    I wasn’t aware that an offered ‘fixed’ plan could change rates like that, but thinking about it I suppose it does make sense and that it’s only fixed once you actually sign up.
    Time to recalculate.

    Even so I think that in the current climate with tarifs 2 years is a bit too long to fix.

    Gas wholesale prices continue to fall so if this is sustained the Cornwall Insight figures for gas and electric will drop at their next press release. 

    These prices feed into the ofgem price cap which looks at historic prices.

     

    Nukecad
    Super User
    NukecadSuper User
    Super User
    December 19, 2023

    @JeffusI had looked at it but the rates were higher than the Fixed Loyalty plan rates that I had beeen offered.

    However just looking again online the Fixed Loyalty rates have changed/increased from what I was originally offered.

    I wasn’t aware that an offered ‘fixed’ plan could change rates like that, but thinking about it I suppose it does make sense and that it’s only fixed once you actually sign up.
    Time to recalculate.

    Even so I think that in the current climate with tarifs 2 years is a bit too long to fix.

     

    Wow, this is even more of a flexible situation than I thought.

    I just checked the newly offered ‘fixed loyalty’ tariff and entered the new figures into my spreadsheet calculation, then went back to check something and the figures being offered had already changed in that 5 minutes.

    I still can’t work out just why OVO estimate my new DDs on Fixed Loyalty would be around £193 a month though when I calculate them at around £134?
    That’s a £700+ a year difference.

    The only explantion for that could be the anual usage figures, and I am using the usage they have on the website - so they must be using something else. (Something that is much higher than my actual usage).

    Edit- I believe that I have found it.
    In a recent email about the Jan price increases they have my anual gas usage as 31485 Kwh, on the website gas usage for 2023 is currently 8444 kWh, almost a 4x difference.

    TBH though it’s still not the full story as if I put 31485 kWh for gas into my calcs then the DD would be around £274 a month.
    Just divide the £2441.95 estimated for gas shown here by 12 to see what I mean.

    Where that 31485 kWh is coming from I have no idea, but it could explain why they have constantly been trying to set my DDs too high.

    email:

     

    Account on website:

     

    I said, Hey - Watts going on.
    Firedog
    Super User
    FiredogSuper UserAuthor
    Super User
    December 19, 2023

    Oh dear, another fictional FAC figure. 

    If you visit ovoenergy.com and click the Fix now button, you should be able to enter your actual usage figures along with the other details, leading to a more meaningful quote. Do you see the same (or similar) Loyalty tariffs as you got in the email? 

    As I wrote earlier, I wouldn’t recommend this route to change your plan, but at least you should get a better idea of what the change might involve.

     

    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
    December 19, 2023

    Well I’ve now found another, and quite different FAC figure on the Plan page of my account. (Thanks @Jeffus)

    I’ve decided that I am going to get my gas reading up to date (the electricity is smart metered), then fix tomorrow, using the account renewals page, and then sort out the incorrect FAC’s and subsequently inflated DD before the first one is due in January.

    As I noted above the Fixed Loyalty tariff has changed since I was first offered it, both unit rates and standing charges.Not great amounts but changed.
    The original figures aren’t on the email just a link, but I had noted them at the time so that I could use them in calculations.
     

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

    Yes, it’s difficult to make predictions, especially about the future.

    Cornwall Insight are calculating  a fall on 1st April currently. Am not surprised, as I mentioned yesterday a few posts up.

    Of course you may still want to lock in for piece of mind.

    This is the announcement.

    https://www.bbc.co.uk/news/business-67772757

    https://www.cornwall-insight.com/press/price-cap-predicted-to-fall-by-14-in-april/

    The ofgem announcement will be on the 23rd Feb and the calculations period stops even earlier. The price cap is using wholesale data at the moment up to the end of the calculation period. From 16 November 2023 to 15 February 2024 .

    As it gets closer to the end of the calculations period so the Cornwall Insight figure will get more accurate.

    This is today's copy of the gas price I posted previously which is driving the fall in estimates

    These are the latest announcement dates for the price cap next year

    • 1 April to 30 June 2024 level, announced by 23 February 2024. Assessment period 16 November 2023 to 15 February 2024 

     

    • 1 July to 30 September 2024 level, announced by 28 May 2024. Assessment period 16 February to 16 May 2024 

     

    • 1 October to 31 December 2024 level, announced by 27 August 2024. Assessment period 17 May to 16 August 2024
      Jeffus
      Rank 20
      Jeffus
      Rank 20
      December 20, 2023

      @Firedog @Nukecad 

      Have you thought about the EON Next Pledge tariff which will track 3% below the price cap?

       

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