Energy Supplier. Tariff coming to an end. Help me decide what to do.

[Cosmos123]

Hi ,
My energy tariff with Octopus is coming to an end in Feb.

I currently pay £140 per month.
Now been quoted £258 per month.
Or variable £134 per month.
Or loyalty fixed £206 per month.

See attached
Can anyone advise.

[quote VioletCharlotte]@AllThatFancyPaintsAsFair

No I don't understand how it works, that's why I'm asking! [/quote]
I really suggest you start with articles on MSE, read as much as you can so you understand the basics. You don't need to know all of the details but how your bill is worked out etc then you can understand your quotes

@fizzypop100

Variable. If you read the smallprint it says they will always notify you of any increase

Just because they notify OP doesn't mean she'll be able to pay it. If she stays on variable now the loyalty fix they are currently offering her won't be available in April - she either locks it in now or hedges her bets on the variable increasing by less than 50% in April and October - which seems unlikely. I know the 'official' advice is stick to the variable but I would actually fix with the loyalty rate, as everything points to the capped price increasing hugely twice in 2022 - and if it doesn't you can leave at any time and go back on variable - whereas the offer won't still be there for you.

@violetcharlotte I personally would definitely take up that offer. Yes Martin Lewis is suggesting staying on the variable BUT that is because he doesn't have access to every single person's usage and current offer. Some people have a comparatively good offer like yours, others are only being offered 3xtheir current use, in which case it would obviously not be good value. He is also saying that the price cap (which is what the variable rate is) could go up by 50% in April, and more again in October. If you are currently paying £130 then 50% extra would be £195 so the £170 fix is pretty good.

You could also look at areas you can cut energy use:
turn off things on standby
turn out lights when room not in use
Replace anything you have that's old high energy, with low energy modern where you can eg LEDs
look at microwave or partial microwave rather than oven on to cut cooking energy
cut the amount of time the hot water is on
consider supplementing solar to heat the hot water

Lots of suggestions on MSE

Making the assumption that your new tariff starts from 1st Feb 2022, then if you go onto the loyalty fixed you will pay 12x206.88 until 31/01/23 = £2482.56

If you go onto the variable, you will pay 2x134.74 = 269.48 until 31st March and then probably move onto the new cap from 1st April. Your break-even amount for the new cap is (2482.56-269.48)/10 = 221.31 per month - which is an increase of 64.2%.

You need to judge if the new cap to be introduced on 1st April will be less or more than a 64.2% increase.

Energy UK estimate an increase of 45-50%
Citizens Advice estimate an increase of at least 48%
Cornwall Insight estimate an increase of 56%
Investec estimate an increase of 56%
Tony Blair Institute estimate an increase of 41%

Ofgem are expected to announce the new cap around 7th February.

@Ariela

You could also look at areas you can cut energy use: turn off things on standby turn out lights when room not in use Replace anything you have that's old high energy, with low energy modern where you can eg LEDs look at microwave or partial microwave rather than oven on to cut cooking energy cut the amount of time the hot water is on consider supplementing solar to heat the hot water

Lots of suggestions on MSE

Great advice.

@jcyclops

Making the assumption that your new tariff starts from 1st Feb 2022, then if you go onto the loyalty fixed you will pay 12x206.88 until 31/01/23 = £2482.56

If you go onto the variable, you will pay 2x134.74 = 269.48 until 31st March and then probably move onto the new cap from 1st April. Your break-even amount for the new cap is (2482.56-269.48)/10 = 221.31 per month - which is an increase of 64.2%.

You need to judge if the new cap to be introduced on 1st April will be less or more than a 64.2% increase.

Energy UK estimate an increase of 45-50%
Citizens Advice estimate an increase of at least 48%
Cornwall Insight estimate an increase of 56%
Investec estimate an increase of 56%
Tony Blair Institute estimate an increase of 41%

Ofgem are expected to announce the new cap around 7th February.

Great analysis. Thanks for this. Will consider this in making my decision.

Hello. Popping in to let you know that we're doing a Q&A with fuel poverty charity National Energy Action about these energy price hikes on Wednesday 23rd Feb at 12 noon. The thread is now open for questions here.