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Price cap increases- To fix or not to fix?

Forum|Forum|2 years ago
December 15, 2023
217 replies
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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

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Firedog

Author

Super User

There’s been an ongoing discussion about this since December here, where you may find some food for thought.

Meanwhile, I’m a bit confused by the figures you show for your current variable tariff. The standing charge for electricity would suggest that you’re either in the north of Scotland or in the South West, and paying on demand rather than by Direct Debit (DD). Since there isn’t too much gas around in far North Britain, I’m guessing Devon or Cornwall. Either way, you could save perhaps £150 a year by changing to paying by DD.

Last, I think the data Ofgem use to fix the second quarter’s price cap will be finalized next week, so we’ll have a much better idea of what to expect. At the moment, Standard Variable Tariffs are expected to fall significantly from 1 April.

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. |

A

azam216

Rank 4

There’s been an ongoing discussion about this since December here, where you may find some food for thought.

Meanwhile, I’m a bit confused by the figures you show for your current variable tariff. The standing charge for electricity would suggest that you’re either in the north of Scotland or in the South West, and paying on demand rather than by Direct Debit (DD). Since there isn’t too much gas around in far North Britain, I’m guessing Devon or Cornwall. Either way, you could save perhaps £150 a year by changing to paying by DD.

Last, I think the data Ofgem use to fix the second quarter’s price cap will be finalized next week, so we’ll have a much better idea of what to expect. At the moment, Standard Variable Tariffs are expected to fall significantly from 1 April.

thank u for the link, i am based in glasgow.

P

Padster

Rank 3

I’m not fixing yet…..Waiting till late August to see what price cap will be Oct to Dec…

Everything is pointing to cheaper but it takes about 9 months for wholesale prices to filter down. And don’t panic if middle east gets worse, their contribution is small beer (10-15%), Russia was 40% and cheap.

Figure 2: Cornwall Insight’s Default Tariff cap forecasts using new Typical Domestic Consumption Values: Standing charge and unit rate (dual fuel, direct debit customer)

Electricity	Q224 CI Forecast	Q324 CI Forecast	Q424 CI Forecast
*Standing Charge (£/day)*	0.58	0.58	0.59
*Per Unit Costs (p/kWh)*	23.56	21.21	22.29
Gas	Q224 CI Forecast	Q324 CI Forecast	Q424 CI Forecast
*Standing Charge (£/day)*	0.30	0.30	0.31
*Per Unit Costs (p/kWh)*	5.73	5.24	5.32

A

azam216

Rank 4

I’m not fixing yet…..Waiting till late August to see what price cap will be Oct to Dec…

Everything is pointing to cheaper but it takes about 9 months for wholesale prices to filter down. And don’t panic if middle east gets worse, their contribution is small beer (10-15%), Russia was 40% and cheap.

Figure 2: Cornwall Insight’s Default Tariff cap forecasts using new Typical Domestic Consumption Values: Standing charge and unit rate (dual fuel, direct debit customer)

Electricity	Q224 CI Forecast	Q324 CI Forecast	Q424 CI Forecast
*Standing Charge (£/day)*	0.58	0.58	0.59
*Per Unit Costs (p/kWh)*	23.56	21.21	22.29
Gas	Q224 CI Forecast	Q324 CI Forecast	Q424 CI Forecast
*Standing Charge (£/day)*	0.30	0.30	0.31
*Per Unit Costs (p/kWh)*	5.73	5.24	5.32

hmmm interesting. i guess we will find out what the second quarter’s price cap will be to get better idea if anyone wants to fix now.

Firedog

Author

Super User

i am based in glasgow.

Thanks. Am I right in thinking that the boundary between the Northern and Southern electricity distribution regions in Scotland runs along the Clyde? So Celtic are in Northern Scotland, but Rangers in Southern?

The only maps I can find show a vague line from the Clyde to the Tay, so it would be good to know whether Greater Glasgow is in fact split between two regions (which match the old Electricity Boards in England, but I’m not sure how far south Scottish Hydro stretched).

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. |

A

azam216

Rank 4

i am based in glasgow.

Thanks. Am I right in thinking that the boundary between the Northern and Southern electricity distribution regions in Scotland runs along the Clyde? So Celtic are in Northern Scotland, but Rangers in Southern?

The only maps I can find show a vague line from the Clyde to the Tay, so it would be good to know whether Greater Glasgow is in fact split between two regions (which match the old Electricity Boards in England, but I’m not sure how far south Scottish Hydro stretched).

no no both celtic and rangers are in southern scotland. when i checked last...my area falls under scottish hydro or scottish power.

Firedog

Author

Super User

Thanks. So I’m none the wiser ...

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. |

A

azam216

Rank 4

Thanks. So I’m none the wiser ...

nah man...its all good lol

Firedog

Author

Super User

… both celtic and rangers are in southern scotland.

OK, I’ve now found a map where the DNO boundaries are a bit clearer. It certainly looks as if the whole of Glasgow is in fact in Southern Scotland region 18, served by Scottish Power:

DNO map from scottishpower.co.uk superimposed on an Ordnance Survey map

Sorry to have been so confused and confusing. I wonder if the border shown is different from that of the (old) Scottish Hydro area.

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. |