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Moving house during the energy crisis, am I better off with a fixed or variable contract?

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I just moved in to the UK, so I am not switching from different providers but signing up with one for the first time. The current provider for this property is OVO. I need to decide whether to go with a fixed or variable tariff. Fixed tariff is more expensive than the variable one right now, but I am afraid that price caps will be raised again and variable tariff will surpass the fixed one in winter. 

 

What are you thoughts on the current unprecedented state of affairs? What should I consider in my case?

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Best answer by Jeffus 5 July 2022, 14:56

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Blastoise186
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Welcome @evgeniypd95 !

Glad to hear you’ve made it to the UK, I trust you’re settling in well here? :)

Personally, I’d recommend going on a fixed rate deal for either one or two years, as now is the perfect time to grab a deal before things start going up again. The current price cap expires at the end of September and the next one is likely to be massively higher, so any possible savings now are very likely to be immediately destroyed in three months time.

How long are you planning to stay in the UK for? This may affect the advice and answers we offer.

Securing energy by zapping security bugs... For that is The Blastoise Way!
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Thanks @Blastoise186. I moved here for good, at least 1 year. 

Your advice makes sense. I am just curious whether I could switch to the fixed contract maybe in early September right before the price cap review or if they will be increasing fixed term contracts continuously over the next 2 months. 

Blastoise186
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You’re welcome. :)

I should have said this earlier, but better late than never. Just so you’re aware, I’m one of the forum volunteers so I can’t access your account or make changes myself but I can give general advice. If there’s ever something I don’t think I can help you with, I’ll always aim to at least point you in the right direction.

I’d probably suggest going fixed rate now if that’s what you’re planning to do, as prices for fixed rate start to creep up in the month or two leading up to the next price cap change. A two year deal should allow you to ride the storm for now and you can always pay the exit fee to switch to variable mid-term later (no exit fee is applied in the last 45 days of the term however).

Securing energy by zapping security bugs... For that is The Blastoise Way!
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Welcome to the country @evgeniypd95 

You’d be wise to listen to the almighty @Blastoise186 as he has wisdom beyond his years!

A few other things to think about before you finalise your tariff….

  1. What type of meter do you have? Is it a smart meter or an old-style non-smart meter?
  2. Is it a single rate tariff you are looking for or can you make use of an Economy 7 style tariff which has an off-peak rate (usually as the name suggests for 7 hours overnight)?

The trend in fixed tariffs is still that they are increasing in price. One supplier has today increased their EV fixed tariffs and so other fixed tariff increases may not be that far behind.

 

Jeffus
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Hi @evgeniypd95

Just to add to the comments from @Blastoise186

UK wholesale gas prices have gone up dramatically again in the last week or so, so unfortunately the fixed price deals have also gone up dramatically. The Ofgem estimate of the October cap being around £2800 for a typical user now looks optimistic to me. It is hard to imagine much good news impacting the price cap now.

The next price cap comes in from October, but the cap figures are released by Ofgem in August normally. 

Cornwall Insights have been reliable in estimating what the cap will be. Prior to the recent wholesale price increases they were already estimating the cap would be £2980 in October and over £3000 in January. These figures now look optimistic to me. 

Ofgem are also consulting on updating the price cap every 3 months, so October, January, April, July.

If you do fix, i would strongly recommend shopping around at the moment. At times OVO have had some relatively good fixed rate offers, at others times the OVO offers have been very expensive unfortunately. 

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Welcome to the country @evgeniypd95 

You’d be wise to listen to the almighty @Blastoise186 as he has wisdom beyond his years!

A few other things to think about before you finalise your tariff….

  1. What type of meter do you have? Is it a smart meter or an old-style non-smart meter?
  2. Is it a single rate tariff you are looking for or can you make use of an Economy 7 style tariff which has an off-peak rate (usually as the name suggests for 7 hours overnight)?

The trend in fixed tariffs is still that they are increasing in price. One supplier has today increased their EV fixed tariffs and so other fixed tariff increases may not be that far behind.

 

Thank you!

  1. It's an old one
  2. Will give them a call tomorrow to check. 
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@Jeffus @Blastoise186 thanks! Will ask a few suppliers for a quote tomorrow. 

Blastoise186
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No worries.

You will need to sign up with OVO in the meantime anyway, so that you can take control of the account and supply. If you don’t do that, OVO will prevent you switching away and they are allowed to do that to prevent non-payment.

You can set up an account here to get things going. After that, it's your choice. But PLEASE be careful to check the reputation of any potential supplier you might want to go for. Some of them have terrible reputations like British Gas and Scottish Power!

Securing energy by zapping security bugs... For that is The Blastoise Way!
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I went with OVO 1 year fix contract. Uswitch did not give me much better options, in any. 

 

Thanks everyone for advice. 

Blastoise186
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You’re welcome. :)

If there’s not already smart meters installed, you may want to consider getting an upgrade as it will help ensure your bills are always accurate. You can do that via https://smart-booking.ovoenergy.com now that you have control of the account.

Securing energy by zapping security bugs... For that is The Blastoise Way!

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