Am I missing something here? Octopus energy.

[Bagelsandbrie]

We are with octopus and our fixed rate ends soon. They’ve sent us an email with options. Obviously like everyone else I am dreading the hike in energy prices and want to do the best thing in terms of variable / fixed rate.

But they’ve sent me this … pic attached. Why would anyone choose to fix at those prices? I understand the variable rate may go up but is it really likely to go higher than the horrendous fixed rate options?

I’m best just to stick with variable, aren’t I?

They will likely go up in October. There are two price reviews per year and it is predicted that the energy cap will rise in october.

It is also predicted prices will come down next april. We will have to see what happens over the next 12 months

I have just calculated that the fixed rates offered to me are 47.4% higher than the April price cap rates for electricity and 69.3% higher for gas

I am also with Octopus and have decided to stay on variable.
Car loan finishes in August just in time for the October increase ffs.

Thank you for helping me understand everyone.

I feel embarrassed my usually good head just can’t take it all in.

I admit I’m having a difficult time at the moment - my son is signed off school with anxiety and I’m trying to find him a new complex needs school place and I’ve got a kidney biopsy next week! Fun times!

Sounds like a really tough time @Bagelsandbrie Sending you strength!
It’s really sad that in this day and age we’re having to make sacrifices just to use electricity and gas!!

@Roses1221

Sounds like a really tough time *@Bagelsandbrie* Sending you strength! It’s really sad that in this day and age we’re having to make sacrifices just to use electricity and gas!!

Thank you.

It’s horrible isn’t it. So many people in similar situations to me and even worse out there.

I am just thankful we’re heading into the warmer weather. God knows what next winter will be like!

We’re with Octopus but they’re only offering us a fixed rate of £460 a month. How do you get a variable rate? We’re gas and electric.

If you're currently on a fix then when that ends you just go on the flexible tariff if you don't choose another fix

Sorry you're having a tough time @Bagelsandbrie.

If it is any consolation, I've gone through the past 12 months of energy usage (you can track this on Octopus app by looking at your balance) and I think even the variable rate direct debits are grossly overestimated.

Based on last years usage I've estimated at worst case scenario for this year my monthly bill should be on average £154. Yet octopus are going to take 200 as a direct debit regardless. I've not accounted for the night rate electricity price, I've just used the day rate to work it out. I've factored in the standing charges too.

Also this year I'm making a concerted effort to use less energy overall (thermostat knocked down a couple of degrees, using the tv less, turning things off standby etc) so should be even less.

It's worth totting up your annual usage as most companies use estimates which can be higher than what you use.

@Whyisitsodifficult

We’re with Octopus but they’re only offering us a fixed rate of £460 a month. How do you get a variable rate? We’re gas and electric.

Just do nothing when your fix ends. Don't opt to go on another fix.

Octopus lets you change your direct debit up and down on the app/online as I've done it a few times depending on my balance

Very true @dementedpixie. It may be worth building up credit in summer.

@PurpleThursdays

I wish I'd have shopped around for a few months ago. I was fixed with Octopus but like a mug I forgot they had no exit fees so I wish I'd have shopped around and got a fix til next year when the prices weren't as bad.

I could have fixed in Sept but it was 'only' a saving of £5, (over the 24 month fix) so I didn't bother - idiot!!

I've fixed now, but at a higher rate than the Sept offer, despite Martin Lewis saying not to fix, I did as I can only see the prices going one way ⬆️ & if I'm wrong I can 'afford' the rate I've fixed at & I'd rather that than worry about how much it's going to go up in April then again in Oct.🤷🏻‍♀️

I switched to Octopus in September before all of this but seem to have ended up with a reasonably good rate for 24 months. (although higher than those that were already with Octopus I think).

You can effectively overpay over the summer I think in order to build up a bit of a buffer for next winter. Like pp says, I think the view is that prices will go down in April 2023, but I'm not sure by how much.

We were offered similar with OVO. I looked at the ts&cs and they stipulated that we'd need to sign up for a smart meter too, which we don't want.

@itsnotdeep

I switched to Octopus in September before all of this but seem to have ended up with a reasonably good rate for 24 months. (although higher than those that were already with Octopus I think).

You can effectively overpay over the summer I think in order to build up a bit of a buffer for next winter. Like pp says, I think the view is that prices will go down in April 2023, but I'm not sure by how much.

Hmmm I really hope the thing about prices going down in 2023 after this is true. If I knew it was true I wouldn’t panic so much as I’d use my credit card to bridge the gap but I can’t do that and not be confident I’ll be able to pay it back. If prices don’t go down I’ll just be stuck in even more debt.

Surely the energy companies are just making more money they are protecting their shareholders the government will have to step in the cost is going up but so are their profits I’m not going to fix right now I with EON £109 up to £121 they wanted £156 I said let’s keep it at £121 see what happens as last year I was working from home.

@MindfulMarch

I hate the way they show the DD amount & not the rates!

Is Martin Lewis STILL saying not to fix?

I decided to fix mine a few weeks ago because with 2 potential price cap rises, I can't see it being cheaper to stay on the variable rates. I just can't.

Mine is more expensive than the rate I've just come off (obviously), but I know I can afford it at this fix. I'd rather have the reassurance.

Martin Lewis currently saying not to fix because the rates are so high.

He did say to fix a few weeks ago, when the fixes were at or 10-20% above the price cap. Incidentally, we fixed in late February with Octopus, at just under 15% above the April 22 price cap, the OP is being offered over 80% above those rates

They've gone up considerably since then, the prices and fix availability are changing day to day as deals sell out. What is the right advice one day is not necessarily the next and no-one has a crystal ball so of course it's a gamble to fix above the price cap as you'll overpay between now and October and no-one knows what the next price cap will be, but my thinking is that prices just can't continue rising exponentially like this, because the group of people who are unable to heat and eat, let alone pay for housing and other bills will get bigger and bigger including lots of traditionally Conservative voting pensioners, ie those who own their own homes and have an income above the minimum but not enough to comfortably pay £3/4/5k a year to heat their homes without a noticeable impact on their standard of living.

@LittleOwl153

One thing to watch - I'm also an octopus customer - is that theybappear to be basing their pricing on the current price cap. Not the price cap from 1st April.

I've had a direct debit recalculation in the last week which has upped my dd - but is worked on the CURRENT prices. I assume they are going to come back to me in 2 weeks time saying oops price rise- need to up the DD again. Mine went up by 50% last week, and will go up by 50% again in April if my calculations are correct. Rumour has it 40% again in October. So your £170 could become £255 in April and then £355 by October... which still makes the £300 look high but might just work out if the October rise is higher....

You need to look at exactly what they are offering and the dates it is offered against your usage and the April price cap figures....

I agree with this in part about Octopus DDs.

Octopus have been very open about the current state of the market and seem to be a very good company, so the three prices shown in the OP (presumably price per month?) are likely be the cost of the same amount of energy at different rates, but it's not necessarily going to translate into a direct debit amount for the OPs actual usage.

However, they don't seem to be falling over themselves to put their direct debits up by the necessary amount to cover the new higher prices.

We were transferred from Avro and were paying £94 pm, which was about right for us, but that was based on the fix that we took out early in 2021.

Despite signing up to a fix that where the unit rates are well over double the cost, they're still 'only' asking for £162 pm and they say that £44 of this is a short term amount to pay off the debt we owe due to not paying enough in the few months that we've been with them. So we're still not paying them enough and should really be paying them more like £250 pm to pay the new higher prices and reduce the debt that we've run up.

I'm comfortable with getting into debt with Octopus and will just pay for what they ask, but there will be people who think they're paying enough and will struggle to catch up when Octopus inevitably ask for more money later on.

It's most likely just an automated email rather than something crafted to encourage you to fix.

I’m with octopus OP paying about the same as you, and being offered roughly the same fixed deals. I assume our fixed terms ended around the same time too (mine ended 10/3).

Other posters are spot on.

You’ll not be on the variable which FOR NOW is a bit higher than before. But come 1/4 you’ll get another hike - 54% or whatever it is.

So I’m bolstering myself to go from £160 on my prior fixed to £199, then more like £300 after 1/4.

Fixing slightly over that (mine was an offer of £340) would protect you against the further potential increase in Oct. So it’s all about whether you are happier to stick on the variable and take that risk (I am, I intend to be very frugal between now and oct and build up as much credit as I can practically afford) or whether you need the long term plan.

Was it Martin Lewis that said if the fixed rate you are being offered is more than 25% of the April 2022 price cap rise then stick to the SVR?
You need to be clear what they are going to charge you for the daily standing charge & per kWh - the DD they quote has nothing to do with this!

OP can you show us the actual KWh rates they are offering on the fixed rates as the monthly amount isn't a good way to compare it to the SVR

This is the latest from Martin Lewis www.moneysavingexpert.com/news/2022/03/energy-price-hikes-is-now-time-to-fix/

From Martin Lewis:

October's price cap is looking to be much higher: Due to the terrible events in Ukraine, on 2 March 2022 energy analysts at Cornwall Insight issued an emergency update of their prediction. It's now forecasting that the rise in October could be a shocking 47%. That would mean it is worth fixing, if you can, at a price no more than around 25% (was 15%) above April's price cap.

(As my fixed rates are 47% and 69% above the April price cap rates I am staying on the SVR)