Renewal dilemma discussion - What's the best option (fixed or variable) in the current energy market?

  • 13 November 2021
  • 41 replies
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Thanks for your input everyone, I've decided to let it go to the variable tariff for now, and just see how it goes. The recent news about another hike sooner than anticipated is a worry though.

What will the approximate price increase be when my current fixed rate plan ends?

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Hi @Will Marwick 

In order to answer that we'd need to know what tariff and prices you are currently paying.

The longer you've had your existing fixed rate the lower your existing prices are likely to be and therefore the % increase will be higher.

My electricity tariff is 15.71p/kWh

Gas is 2.92p/kWh

Both on 2 year fixed rated which expires 24th November 2022

Regards,

Will

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Those are very good rates at this current time, so probably worth keeping that fixed rate to the very end of the contract.

There are a few uncertainties as to how the cap increase in October will be assigned, whether there will be a greater increase to gas prices than electricity prices, and how the thorny issue of standing charges is addressed. 

By applying around a 65% increase to existing variable unit rates you are potentially looking at around 48p/kWh for electricity and 12p/kWh for gas. This will vary by region and the increase could be weighted more to one fuel than the other.

Current standing charges are in the region of 40p/day for electricity and 27p/day for gas. These could go up, stay the same or even go down if burden is shifted away from standing charges.

All this involves a lot of guesswork and all views are my own!

Thanks very much for the information. Appreciate it.

Regards,

Will Marwick 

 

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Based on 12000 units of gas and 2900 units of electricity ofgem typical user.

https://www.cornwall-insight.com/press/d...ent-looms/

So they are estimating £3,363 from January for typical usage on the price cap. Corwall Insight have been reliable in the past. Martin Lewis from Money Saving Expert quotes them regularly. 

OVO one year current offer for my postcode for same ofgem typical usage would be  £3,366.84. So basically in line with the cornwall insight estimate. OVO quote  based on (inc vat). 

Gas standing charge 0.2752
Gas unit cost 0.1429

Electric standing charge 0.4444
Electric unit cost 0.4791

We use a bit less than the ofgem typical usage in our home. When comparing offers, it is always worth using usage figures as accurate as possible. Ofgem are currently planning on introducing quarterly changes to the price cap and have said they can't rule out other suppliers collapsing. 

Of course there is a lot of assumptions built into the Cornwall Insight estimate and the OVO and other suppliers fixed rates will provide a lot of piece of mind around costs. 

Big unknowns are what the next Prime Minister might do, what Ofgem might do and what might happen to wholesale costs. 


Hi

i am on simpler energy  priced capped at moment

dont know what to do   Never changed to a plan

need advice are these any good

i know it’s going up in October my usage is just below cap 

I have plans on my account 

One year fixed better energy 204 a month estimated 

one year fixed smart 235

2 year fixed 237 a month estimated 

I don’t know what to choose 

are these good deals 

what is the estimated for when they say fixed

Any help Appreciated

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Hi @Newbe12

If you look at the quotes on the website after logging in you will see something like this.

If you click on tariff information label you will see something like this

This will show you 

1. The unit rate and standing charge for gas including VAT

2. The unit rate and standing charge for electricity including VAT.

3. How much gas and electricity OVO think you will use in the next year.

4. The estimated cost for gas and electric including VAT. 

So like you i use a bit less than what Ofgem the regulator says are typical usage of 12000 units of gas and 2900 units of electricity. 

I would always check the estimated usage looks reasonable compared to want you usually use in a year. 

Does that help for starters before i say anything else? 

Thanks for getting back to me

my plans don’t come up with tariff information 

it says renew now so if I press that I am automatically bound with out seeing the tarriff

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Hi @Newbe12

 

OK do you see something like this?

 

Yes 

I think the quoted price on them is too low

Without giving too much detail have one extra person in house so will be using more energy so hard to choose what plan to go on

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Yes 

OK

See the little down arrow head? Click on that.

You should see something like this after clicking depending on the device you are using. This is from an android phone. 

Does that work? 

Thankyou

so I am in simpler energy at moment

circumstances are are got somebody new in house energy usage will go up say just under price cap

I don’t have a smart meter

so plans on offer are 

2 years fixed loyalty £204+10 a month estimated 

elec 47.47                        Gas   14.48

standing 54.64.              Standing       27.52

1 year better energy  £204

elec 47.31                        Gas 14.44

standing53.64.              Standing 27.52

2year fixed £249

elec  59.93                      Gas  17.87

standing54.64               Standing27.52

sorry new to all this which one is the best

thankyou fir your help

 

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Thankyou

so I am in simpler energy at moment

circumstances are are got somebody new in house energy usage will go up say just under price cap

I don’t have a smart meter

so plans on offer are 

2 years fixed loyalty £204+10 a month estimated 

elec 47.47                        Gas   14.48

standing 54.64.              Standing       27.52

1 year better energy  £204

elec 47.31                        Gas 14.44

standing53.64.              Standing 27.52

2year fixed £249

elec  59.93                      Gas  17.87

standing54.64               Standing27.52

sorry new to all this which one is the best

thankyou fir your help

 

Hi @Newbe12 

I would click on the Tariff Information Label link and just check the forecast usage looks reasonable based on your previous usage.

I don't normally like to give recommendations for whether to fix or not.

All i would say is that energy prices are very volatile so fixed rates will give you a huge piece of mind and protection against any dramatic unforeseen price rises. That is important for many people. 

The 1 year fixed rates and 2 year loyalty rates at the moment are pretty close to what industry experts think the price cap will be in October and January. Of course the price cap could go higher or lower than these experts predict , particularly January. I can't personally see prices falling. 

There is the possibility a new prime minister or ofgem the regulator makes further changes, but i doubt these will be material in the short term. 

The other 2 year price cap is obviously expensive given the 2 year loyalty quote.

@Blastoise186  i think looked at some of the wording regarding the loyalty plan. I don't think you actually need to sign up for the £10 boiler cover if you don't want to.

So if piece of mind is important and you worry about energy costs then at least go for the 1 year quote and think about the 2 year loyalty quote. 

Does that help? 

 

 

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