Fix the energy tariff now or stay on standard variable.

[SophieHasOneQuestion]

I am with EDE and current tariff ends on 31st March.

I noticed that over the last 4 weeks, the my fix term tariff option has increased from £155 to £186 and this morning to £226.

I was hoping to stay on standard variable in hoping that better deal will come up, but it seems the deal is getting worse and worse.

In April, if ofGem increases the cap, will standard variable increase dramatically too?

Really appreciate and advice on if I should fix the deal (exit fee £100) or stay on the standard variable which is about £90 less.

Thank you very much.

@GeneLovesJezebel

So my offer from SP is gas going up to 18.9p from 3.85p, and electric to 55.67p from 19.1p. Gas standing charge up 3p, electric almost doubling. Surely this can’t be right, I can’t afford that. They are quoting that my DD would treble.

The trouble is that they don’t say what rate I will be on if o don’t take their offer.

@GeneLovesJezebel You'll be on the capped standard variable rate which is reviewed twice a year at present.

@brainhurts Those standing charges are huge, you'll be paying £225 electricity and £149 gas a year in just charges before you even use a single unit of energy.

We fixed on the day the price cap rates were announced with an Octopus loyalty fix, we managed to get rates of 32.42p kWh and 23.76p per day for electricity and 8.77p kWh 26.10p per day for gas.

I've since seen our rates for the East Midlands on the capped SVR and we're only slightly over that with October's rise not affecting us until March 2023.

@MrsPnut
Thanks for your response. Like most I don't know what to do for the best . It was only £80 a month more than I pay now. Kind of panicked and thought ok I can scrape that together .
It's just one huge gamble

Forget your direct debit & how much you have paid per day & look at your tariff!

{I have set the direct debit with my energy provider not them tell me... Plus the daily cost on my smart meter changes every day depending on what I've been doing & how much I've used}

You need to find out your current prices for electricity
A. for daily standing charge
B. Per kWh

For example under my fixed contract til May 2022 my electricity is:
A. daily standing charge - 24.50p
B. Price per kWh - 17.30p

The price cap coming up in April for electricity will be:
A. Daily standing charge - 45p
B. Price per kWh - 28p

Your latest bill will give you an estimate on the number of kWh you use in a year which can help with sums.

For example with my annual usage & current tariff I pay roughly £444 per year for electricity.
With the April price cap (& when my fixed tariff ends) I will be paying £746 per year!

(Gas will be going from £665 to £1430 - Gulp!)

Hope this helps.

@brainhurts I know, we held off until the price cap was announced but moved straight away because I knew fixed rates would rise rapidly.
It depends on lots of variables including where in the country you live and how much energy you use along with any early exit fees for your fix. Have you used your actual last year's usage and calculated what your annual cost might be, never rely on what they quote as your monthly DD because it's never accurate.

@MrsPnut
Hi , we went of my annual usage. Live in the midlands.
Like I said I panicked thinking' ok I can pay that for two years maybe it will even out at some point '
It's just so difficult at the moment.

[quote MrsPnut]@GeneLovesJezebel You'll be on the capped standard variable rate which is reviewed twice a year at present.

@brainhurts Those standing charges are huge, you'll be paying £225 electricity and £149 gas a year in just charges before you even use a single unit of energy.[/quote]
I can’t find what the capped standard variable rate is. I’ve no idea what I will be paying next month if I don’t fix, and I’m not fixing at those prices.

Your capped rates will be around the level shown in the screenshot (might be a little higher or lower as these are the average rates)

Ignore Martin Lewis, his advice in the autumn was not to fix and people who listened to him will, for the most part, be paying over the odds come April.

Check the T&Cs of fixed price offers to find out how much you'll have to pay to exit them early. Mine is £30 per fuel so it was a no-brainer to fix. If for some reason prices plummet I can exit anyway. That's why I think it's best to fix, if you find a deal that's more than £60 a year cheaper you can take it.

You need to work it out from this document www.ofgem.gov.uk/sites/default/files/2022-02/Default%20tariff%20cap%20level%20-%201%20April%202022%20-%2030%20September%202022.pdf

If you pay by DD then you choose other payment method, the nil kWh column needs dividing by 365 to give you the daily standing charge and the m column needs dividing by the kWh in the header.

For example, I live in East Midlands and the rates for our area are 7.72p kWh 25.92p per day for gas and 31.33p kWh 42.62p per day for electricity.

There are lots of sources with the average capped standard variable rate on but this is the only one with the regional prices that I have found.

All the fixes will have jumped so probably out of most people's price ranges. It's the price per kWh you look at not an amount per month

I’ve just found the new prices from April- non fixed prices - and they’re massively below the fixed prices. I’d be a fool to fix.

@MorningStarling

Ignore Martin Lewis, his advice in the autumn was not to fix and people who listened to him will, for the most part, be paying over the odds come April.

Check the T&Cs of fixed price offers to find out how much you'll have to pay to exit them early. Mine is £30 per fuel so it was a no-brainer to fix. If for some reason prices plummet I can exit anyway. That's why I think it's best to fix, if you find a deal that's more than £60 a year cheaper you can take it.

But anyone fixing last autumn would have paid a lot more over the winter just gone so it's swings and roundabouts.

No-one could have predicted the massive increases in the last few weeks and Martin Lewis has always been very open about the risks of fixing or not fixing and while there might have been a short period last autumn where his advice turned out to be incorrect, anyone listening to him will have saved many thousands over the years.

@MorningStarling

Ignore Martin Lewis, his advice in the autumn was not to fix and people who listened to him will, for the most part, be paying over the odds come April.

Check the T&Cs of fixed price offers to find out how much you'll have to pay to exit them early. Mine is £30 per fuel so it was a no-brainer to fix. If for some reason prices plummet I can exit anyway. That's why I think it's best to fix, if you find a deal that's more than £60 a year cheaper you can take it.

Except that isn't what he said. It's the simplistic, single line take out from what he said, but not his full advice at all!

That's why it pays to read his site, rather than the journalistic excerpts from it.

I have been quoted similar by EDF. My current direct debit is £77 per month on a fixed rate tariff that finishes soon. Moving to the new fixed rate will be £240 per month, so triple what I'm paying now. I live in a tiny, terraced, well-insulated house. Washing machine is used once a week. We only heat the living room and bathroom. Only 2 of us, so not much hot water etc. being used.

Projected to be £130 per month if I stay on the standard variable tariff, so I'm staying with that. It might go up higher than £240 in October, I suppose, but they'd have to raise the price cap by a lot for that to be the case. I can't stand the thought of them profiting of my anxiety that I might not be able to pay my bills if the prices skyrocket even further.

The electricity standard charge has absolutely leapt up too, so it's not like I can even sit here in the dark and cold and save money!