Should I commit to a fixed deal, or should I wait?

From my understanding it looks the the cap is due to come down again soon.

Currently the fixed tariff for me makes no sense to me, its roughly the same as the current pricing but looks to be higher with the new cap, just hoping ovo bring out a tariff more in line with the cap assuming as early reports suggest it will be going down.

Any idea’s if the fixed tariff options will be updated or will we all be sticking to variable as it has that feel similar to the university price cap in that everyone just charges the max because they can?

It rather depends on what you mean by ‘worth it.’ There are many customers who would rather know precisely how much they’re going to spend on energy for the next year than save a few pounds for a few months by staying on a variable tariff which is just as likely to rise again sometime over the next twelve months. Cornwall Insights have a pretty good crystal ball; you might have a look at their predictions for the next year: Cornwall Insight's final forecast for the October price cap

Who would have thought that strikes by liquefied natural gas workers in Australia could lead to higher energy bills in England next winter?

For what it’s worth, my four penneth is to wait until October to see how suppliers react to the new levels. It is a shot in the dark whatever you decide of course 

I do wonder if we will ever see much competition on standard fixed rate tariff again. 

I suspect much of the focus will be on time/type of use tariff from now on.

Not a surprise there isn't much switching between suppliers going on, although it has picked up. 

https://www.electralink.co.uk/2023/08/price-cap-helps-switching-increase/

As someone who managed our workplace contracts with the craze of fix now as the increases are endless we almost fixed in at £1 a kwh last year. letting our contract go variable has saved thousands, we have now fixed at a price not far off domestic pricing. So for me personally fixing for peace of mind is a mixed blessing, I was one of the people who fixed at 60p kwh just before the price caps come into play as I was worried about it going sky high. I’ve traditionally been against variable prices, but historically at least in my mind variable were always higher.

After seeing the caps I can’t see the price cap simply doubling, I just feel like its variable will now be capped and fixed just above as you can.

I’m probably going to do as @BPLightlog  said and wait till October price predictions come through. If the ovo fixed tariff’s come close to the current predicted prices tba 25th I imagine I'll consider fixing. In my mind prices will probably start to rise again the closer we get to the new year. 
 

Thanks for your real-life story; it’s always helpful to hear of others’ experiences. I fixed a few months early in 2021, which meant that I missed out on the first couple of alarming price hikes. It really hit hard when that contract ended in January this year:
  

I suspect the variable rate will be higher in Q1 and Q2 2024 so fixing now may be as good as it gets. So over the cold months in the new year the variable rate will be more expensive. 

The longer you leave it, the higher the risk fixed rates may creep up as winter approaches, even though the weather is relatively mild and gas storage is pretty full. 

Just a personal view. 

I don't think any supplier is looking to build much market share apart from time of use type tarrif now. Those times are gone. 

This is what trusted prophets are saying.

Hey @spidermorse47,

It’s a tough decision, considering what’s happened in recent years with the energy crisis. I’m facing the same decision myself! 

Keep us posted with what you decide 😊

I was told on the phone by an OVO agent last week that a new tariff will be announced on 1. October with lower rates than the current 1 year fixed rate tariff. My contract ended on 25th and he advised me to let it go to variable rate for a few days then sign up for the new fixed rate tariff online after 1. October.  Fingers crossed he knew what he was talking about! I'll know in a couple of days! 

Hey @Tricia,

Yes the new rates will be effective from the 1st of October, this will allow you to compare to the fixed rate plans.

This FAQ may be helpful:

• Price cap changes: supporting our members News

If you visit your renewal page, you should see the new rates both for fixed and variable tariffs.

Thank you for all the replies. Sound and logical in all you say, I'm sure they will help my decision. 

The renewal page is not yet showing a change for the 1 year fixed rate tariff. It should show on Sunday or Monday! 

I think you’re rather missing the point of fixed-rate tariffs. OVO and other energy companies determine their prices depending on what they expect to have to pay in the future. Until the price cap was introduced some years ago, they were pretty much allowed to charge what they wanted to, and it was simply supply and demand that kept prices in check. This wasn’t working for many customers, though, who didn’t shop around for better deals but simply stayed with the same company year after year regardless of whether they were paying over the odds. The price cap was intended to prevent this, and set a limit on how much companies could charge.

The cap used to change twice yearly, but since last year it’s been calculated every quarter depending on how wholesale prices moved, bearing in mind that companies have to buy what they expect to need in advance, at prices set by the wholesale market. Now it’s possible for customers to know what they will be paying for the next quarter.

This has been pretty volatile over the past two years, so those who rely on knowing what they can expect to pay over a longer period - a year or two - have the possibility of buying at a fixed price. The price a plan is offered at can change anytime, as suppliers follow the changes they see in wholesale markets. However, once a customer accepts an offer at a specific price, it won’t change over the length of the contract. 

So there will not be any change in the offer price for fixed tariffs simply because a new price cap enters into force. The supplier is gambling on having a certain number of customers on a particular tariff; this is the reason why there are exit fees if the customer chooses to end the contract early and start to pay at a perhaps lower variable price, which will change with the price cap unless something drastic happens in the next year or two. 

I live on my own and I'm in credit,I asked for a refund online and it says, that because I don't have a direct debit,I can't get a refund, should I go for a fixed deal with Ovo?as I just pay money into my account monthly and I'm in credit?

Please consider paying by monthly Direct Debit. For the typical dual-fuel household, it represents a saving of nearly £120 a year - that’s £10 a month for the privilege of going to the trouble of paying into your account each month, as opposed to letting the bank just see to it for you. If you do this, your credit balance will be factored into the calculation of your monthly payment, which will aim to bring your balance to zero a year hence, i.e. at the end of next winter. 

Many of the more attractive tariffs, including fixed-rate ones, are only available to those who pay by Direct Debit as you’ve probably realized. Choosing a fixed-rate plan is a gamble, which often pays off. It varies a lot around the country what rates are available, but the ones I’ve seen (and I only look at electricity prices) still have unit rates below the current standard variable tariff (‘Simpler Energy’). This looks like a good idea since unit rates are about to rise significantly with the price cap from 1 April. The picture is a bit less clear as regards standing charges: they are set to fall for many from next month, but they’re widely expected to rise again by 4-5p a day in the autumn. You’ll have to do your sums carefully to see just what you’re likely to pay over a fixed-rate term compared with what you might otherwise pay. There’s also the question of the exit fee: this will be added to your costs should you change your mind before the term is up, so should be factored into your calculation. 

One big advantage of a fixed-rate plan is that you know precisely how much you’ll be paying for the energy you use, regardless of changes in the price cap which are sometimes triggered by events far beyond your control - like wars in Eastern Europe, strikes by Australian coal miners or tariffs imposed by unfriendly gas exporters. Peace of mind may well be worth paying for.

Thanks very much for your advice 

I will phone Ovo tomorrow 

As I am in credit in my account and I'm a low user, Can your direct debit increase?

Someone told me that they do this 

I'm happy with Ovo energy 

My monthly bill there was £86 for dual energy and I live on my own 

Your DD is reviewed quarterly to make sure you’re still heading for the right target, although we don’t yet know what this will be once we move into summertime. If your annual usage projections are at all accurate (they’re on the Plan page labelled Future annual consumption), there shouldn’t be any problem with major changes to the DD. You’ll always be advised in advance if the computer thinks the DD should change, giving you time to react.

 Just to note that I don’t think that’s fully correct.
It’s your money and you are entitled to request it be given back to you when it is reasonable to do so.

I believe it’s saying that you can’t request a refund online unless you have a Direct Debit. (Mainly because without a DD having been set up they don’t hold your bank details to send any refund to).

If you don’t pay by Direct Debit then you have to phone to request the refund, and they will confirm which bank account you want it sent to or if you want a cheque.

Unless you are leaving your current supplier and switching to another supplier, or  you are moving home and so closing your account, then they do normally want to keep a ‘reasonable amount’ of the credit balance, usually enough to cover a months worth of future usage.

For more info see: How to get a refund when your account is in credit

PS. It’s seems noticible that a number of those OVO ‘How to’ articles tend to be written with the assumption  that everyone has a smart meter and everyone pays by Direct Debit - of course that isn’t always the case.

TBH I don't see any reason not to have smart meters and/or pay by direct debit. as long as you have a bank account of course, there are some people who don’t.

(Unless you have been influenced by the many, usually unfounded, scare stories out there.
Let's face it there are always some people who like to tell stories to scare other people.
Some Journalists get paid for writing nothing but scary stories).

Whether or not to fix your tariff is another choice, but usually it's a good thing to do.
Yes there is a slight risk that you will loose out if electricity/gas prices or the standing charges fall, so it is a bit of a gamble in that respect.
Do you expect prices to fall much? It could happen but ...

Apart for a short period, (when a fix ended during the recent energy crisis and no supplier was offering new fixes), I have been fixing mine since I moved into this flat in 2021 and have not regretted it.
I usually go for a 1-year fix, but have been know to ‘hop’ to a different (cheaper) one after just 6-months.
And yes, you can usually ‘hop’ like that if a cheaper fix catches you eye, but weigh up if that will mean an early-exit fee or not. (If you are ‘hopping’ from one OVO fix to another OVO fix then there is often no early-exit fee to pay).

Just beware of the Extended Fixed plan. Other fixed plans don’t attract an exit fee (last time I looked, at least) if you switch to another (not less restricted) one, but Extended Fixed does.

Just wanted to say a huge thanks to ​@Firedog for jumping into the thread and sharing your thoughts. Your advice was really helpful, and I hope that it helps you ​@Katy65!

I’ve left a couple of resources below that might also help:

• How does OVO Energy calculate my Direct Debit? Tutorial

• Getting to grips with the Direct Debit Calculator on your online account Tutorial

Thanks guys for your help and advice 

Much appreciated 👍