To ask for British Gas advice?

[MahMahMahMahCorona]

We are served by British Gas for electricity and gas. Today our current tariff expires and we have the opportunity to:

A) go fixed rate at £100pcm more than our current tariff expiring December 2023,
B) go variable with the proviso that they write to us 30 days prior to any price changes at which point we can switch, or
C) stick with our current tariff which will essentially mean an increase of £60pcm fixed until Jan 2023.

I don't know what to do. Which would you go for? Do you think the prices are going to increase by 40% in April, or more, at which time the fixed rates we've been offered today will also increase?

I'm so confused.

Im sure the advice I saw before was to go variable until April, let me see if I can find a link - there was another thread recently

Once you have taken a fixed rate the rate per kWh will not rise until the end of the fix.

Look at the rates offered per kWh on the fixed tariffs and use them to compare against the standard variable rate costs per kWh.

Think if the difference is less than about 50% then it might be worth fixing but if more than 50% then you might be better on the standard variable rate.

All of the big energy suppliers the ones having to take on failed energy supplier's customers are expecting the price cap in April to move substantially higher. They've all had at least 50% increase in the cost of providing energy with nowhere near that amount of increase coming back in to them (which is why so many on-demand suppliers have folded). Ofgem has to agree to lift the cap substantially or we'll have more companies going to the wall which is not sustainable for the government. Behind the scenes it's very fraught at the moment.

Personally, I'd be checking the standard tariff unit prices and comparing them with the ones offered in your deal. If the rise is less than 40% I'd lock in now. That's just my personal perspective though...I'm a planner and I'd rather know my budget for the next 12 months than hope that it won't be too bad come April because none of the fixed price offers after the price cap increase will be lower than the cap itself. You might be happy to ride it out until closer to the time to save at least £120 in the short term.

What’s the fee for leaving in April if the new price cap is lower that the new tariff?

We fixed for peace of mind, £40 more pm than we pay now.

C) stick with our current tariff which will essentially mean an increase of £60pcm fixed until Jan 2023.

I'm not sure what this means? How are you sticking with your current tariff when it is coming to an end?

And, if I've misunderstood and they are offering you a new fixed rate with an increase of £60...where is there any benefit in opting for a fixed rate charging £100 more?

As a pp said, you need to know what they are offering looking at your standing charges and unit costs.

Fwiw, I think the cap will increase more than 40%.

Oh thank you for coming back to me. Chap on phone said to look at the unit rates rather than the cost pcm but I can't get my head around them (I gave birth end November and seemingly my brain was also removed) so I'll write them down:

Current
Gas 3.125 per kWh
Electric 16.909 per kWh

Loyalty Offer (fixed until end Jan 2023)
Gas 7.154 per kWh
Electric 28.538 per kWh

Standard Variable
Gas 4.169 per kWh
Electric 20.680 per kWh

Fixed Rate (until December 2023)
Gas 7.844 per kWh
Electric 34.985 per kWh

SV looks best option but with 40/50% increase in April, does the loyalty or fixed ensure I'm better off? Wrapped in a blanket...

I’d go loyalty offer, prey by this time next year thing are more sustainable, check the exit fee, and if by some miracle the variable is lower come April I’d leave.

Think my maths is about right here:

Working from the difference in the SVR to the 2 fixed you've been offered (as your existing tariff will not be available):

Loyalty fix would be 71.6% higher for gas and 38% higher for electricity

The fix would be 88% higher for gas and 69% higher for electricity.

@Catcrazy83 and @dementedpixie - thank you for helping with the figures! Exit fee for loyalty is £150.

Just to get it right in my head: essentially the kWh / unit cost per day could double from the current SVR?

It is though that the SVR may increase by around 50% not 100% .

On the SVR values you have given that would give:
Gas 4.169 + 50% = 6.25
Electricity 20.680 + 50% = 31.02

If it goes up 60%:
Gas 6.67
Electricity 33.08

Honestly, I can't tell. The loyalty tariff might or might not be preferable over the new cap coming in April. But, you'll be paying two cold months at the higher rate when you could be on the current cap.

It would mean that come October, if the rates go up the predicted 20% then you might claw some of that back over the higher use months of Dec/ Jan.

Maybe you could hedge your bets and take the loyalty tariff available to you today and wait till Feb 7th when they set the new cap rate and then make a proper comparison when you are still in the cooling off window. (But you should double check you'd be allowed to do that)

But, I think if you are in any doubt go with the variable rate.

Gas is expected to rise a lot more than electricity I think. The advice about prices rising 50% in April is probably an average based on a typical mix of gas and electricity.

If you take the loyalty fix, it's probably not a huge amount different to what's coming in April. You will pay a little more over the next couple of months, but that could be offset by a couple of months cheaper after October this year when the cap will change again.

Unless the government actually steps in and forces the industry to reduce the price to the consumer, it's probably not going to be a significantly worse deal than staying on the cap, same price within about a tenner a month.

I think we're going to stay on the cap, but I know it's a risk that prices could rise again in October and then I'll wish I took a fix.

I panicked and fixed (before i'd seen the advice to stay on the variable)

Actually glad i have now, its gone from £75 to £125 a month DD but my estimated usage is around £112 a month.

I dread to think what's going to happen April, but at least i feel like i haven't got to panic as i'm fixed for 2 years.

It’s just a gamble, like fixing your mortgage rates, they know people are willing to pay more to feel secure. Human nature.

In reality fixing until the end of the year will be a large increase compared what you are currently paying and an unknown increase to aprils rates. The price rise is certain for everyone so when yours ends you’ll be on that rate anyway.

You have two options until the end of the year when you’ll be on an expensive tariff anyway:

1. 3 months cheap svr > unknown fixed rate/svr 8 months
2. high rate fix for 11/12 months

You just need to decide when the savings on svr for the next 3 months outweighs the increase over the following 8 months. Don’t forget that Jan-April are the coldest months where you’ll use most of the energy you’ll use all year. May-September is essentially nothing.

Nobody can tell you that, it’s just a gamble.

If you don’t have a smart meter and want to get cheap energy just ‘use more energy on the cheap tariff’ by giving a higher reading 🙊.

Good luck even speaking to a human there.

The loyalty tariff Octopus has offered me is 121% higher for gas and 64% higher for electricity so I'm staying on the variable rate

I'm also in the same boat.

Problem is, the three options they're offering me to fix are all £300 a month!

I've only been using between £120 and £160 a month. Since October I've been doing monthly meter reads and submitting and paying literally as I go.

That option seems to have now disappeared and it just says I will be sent a quarterly bill. Totally panicking. I'm estimating (but it is a guess) that January will have cost me about £250 - already gone right up (and it says I've used less than I used last year)

Can anyone help with British Gas's billing system? They literally charge you per unit used for the electric but I have no clue how they work out the gas! So for the electric, if I know it's say 16p it equates to 16p for unit moved on my meter. The gas makes no logical sense at all.

@Lilolily

Good luck even speaking to a human there.

Yep. I've given up. Literally can't get through.

@CoastalWave they work out gas in volume. Converting it to energy kWh.

@CoastalWave

I'm also in the same boat.

Problem is, the three options they're offering me to fix are all £300 a month!

I've only been using between £120 and £160 a month. Since October I've been doing monthly meter reads and submitting and paying literally as I go.

That option seems to have now disappeared and it just says I will be sent a quarterly bill. Totally panicking. I'm estimating (but it is a guess) that January will have cost me about £250 - already gone right up (and it says I've used less than I used last year)

Can anyone help with British Gas's billing system? They literally charge you per unit used for the electric but I have no clue how they work out the gas! So for the electric, if I know it's say 16p it equates to 16p for unit moved on my meter. The gas makes no logical sense at all.

That's why you need to know their SVR tariff as thats what you automatically go onto once your fixed rate ends. Have they not informed you of all your options including the SVR tariff?

Can anyone help with British Gas's billing system? They literally charge you per unit used for the electric but I have no clue how they work out the gas! So for the electric, if I know it's say 16p it equates to 16p for unit moved on my meter. The gas makes no logical sense at all

It works through the calculation between volume of gas and the amount of energy this works out to be on your bill.

This is how they convert units to kWh!
Its complicated

If you don’t have a smart meter and want to get cheap energy just ‘use more energy on the cheap tariff’ by giving a higher reading

God, but what if they caught you? 😬 I suppose the very least that would happen is you'd get dumped on a pre-payment meter.

@dementedpixie some values on that screenshot will change though depending on the quality of gas being pumped around. It is to ensure that we pay for the energy, not the volume, of gas. Not all gas produces the same amount of energy, just like not all water contains the same amount of minerals.