Just had an offer from Octopus

[quicklybeendrivenmad]

Octopus energy
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Your current tariff
Flexible Octopus
Unit rates
Electricity: 27.35p per kWh
Gas: 7.28p per kWh
Standing charges
Electricity: 48.26p per day
Gas: 27.22p per day
Your new tariff options
Octopus 12M Fixed
£989.12
monthly estimate
Loyal Octopus 12M Fixed
Most popular
£945.53
monthly estimate
This tariff features 100% renewable electricity and fixes your unit rates and standing charge for 12 months. There are no exit fees, so if you change your mind, you're in control.
Your new quote
£11,869.50

God knows where these figures have come from, last months gas was £19 and Electric £180!! Who the hell would sign up to £989 per month at nearly £12k a year. Love how they say Loyal Octopus "Most popular" popular to who? Think they mean them.

I feel the exact same, we pay £100 a month at the moment, but if this happens again and again we physically won't be able to pay it. I don't know how this can happen, a lot of the country is going to be feeling the same. How bills can treble or more over night is crazy to me! I've never seen anything like it

That's massive.

A friend was offered a deal that was a massive increase in monthly payments. When we crunched the numbers, their "estimate" was based on her using 60% more energy than she did over the last 12 months.

When we worked out what she would pay on those rates but at her actual level of usage, it was nowhere near as much.

I think some of these companies are trying it on.

Unless they are pumping liquid gold into your home, this is simply ludicrous.

Cancel your DD, insist they bill you based on your actual usage every month and pay what you can afford.

I think we all need to call their bluff and do the same thing.

This nonsense is simply going to crash the entire economy...

The government needs to re-nationalise the whole lot and be done with it.

@EtnaVesuvius

just find it hard to hear people coming out in defence of energy companies

++++

The thing is the energy suppliers are really not making much profit on customers (if any profit at all).

The energy producers (oil and gas companies) and the energy generators ( including and especially wind farm owners as they have no fuel input costs) are the ones making massive profits.

If consumers either refuse or are unable to pay for these higher prices then the energy supply companies will simply go bust and this time there really will be no other supply companies willing to take on these stranded customers.

Ironically the cause of the price hikes on electricity and gas is largely due to reduced supplies from Russia. But because of the higher prices the Russians are making the same amount of money on selling their gas but just on lower volumes. It's completely insane.

Part of me thinks that the government will intervene and take up the slack. But then another part of me says , if the government was going to do anything they’d have announced it by now.
Its not as if they don’t know what’s coming.

Boris Johnson said that while the war in Ukraine is on, the rest of Europe will
have to endure higher energy costs.

But not all of Europe is, it’s is Britain’s that’s getting hammered.

And Truss doesn’t believe in hand outs apparently.

@1dayatatime , the thing is, most wind farms are really expensive to set up, and so to get financing, wind farms will have hedged their sales prices to guarantee their revenue streams. This is true of other generators too.

This means that it isn’t the generator making the money, it’s the banks. It’s entirely dependent on whether generators hedge 100% of their output. Profit sits all over the place - making it hard to legislate for.

I definitely agree with you on Russia.

Energy companies don’t make big profits?.. well maybe some don’t but British Gas did !

Profit on energy supply is tiny across all suppliers - hence why so many went bust. I think energy suppliers generally make 2% margin on supply. So for every £100 of energy they buy, they sell it at £102. That profit includes all the work on forecasting, hedging, customer contact, billing systems, transmission, regulatory compliance. It’s very risky too. I think Ofgem are making more cap allowances to make it more of a sustainable business model - nobody in their right mind would be a supplier.

I think BG have some generation and trading profits. I do know that generation has been absolutely hammered over the last five years with ultra low prices which would make sense. Generation is only profitable if it’s unhedged.

Trading is a bit of a different ball game - I guess volatility creates opportunity - but that’s more like the world of financial services (not my area of expertise…)

I think Shell are too

No fixes

I don't believe for a second they aren't making profit or a lot of it. I think they probably tell their staff and customers that so people won't mind paying. The chiefs of these companies are earning millions. You only need to do a quick Google to find out what they make. It says as of June 2022 that the chief of SSE had a pay rise of 47%. They couldn't do that if they didn't make profits, or all the profits are going to the big ones at the top of the pile. None of it makes much sense

They absolutely are trying it on. Just because prices are going up doesn’t mean your usage will. In fact, if anything you’ll use less this winter because we’re all a bit more mindful.

This is why everyone should be VERY wary of fixing at these astronomical prices. Check how much you used last winter first. I bet your bottom dollar that the energy companies are ‘estimating’ that you’ll use more. It’s a racket.

Ultimately customers pay for energy they use so if you lower your DD manually, be careful that you aren’t getting into too much debt - be prepared to pay more as the year goes on.

As I said, they wanted to increase my DD to around four times what I’m currently using (this was back in May). I’m actually around £300 in credit.

Why did they do this? Because the messaging we were getting in the news was that prices were going up a lot. They were banking on many people simply accepting it because ‘prices have gone up’ and then not actually checking how much they were using and how much credit they were in.

The same is happening now. The messaging is that prices are going up (which they are) so they are trying it on with offers for HUGE fixed deals. They are banking on some people being so afraid that they will accept them.

Prices are going to rise by around 86%, not 400%.

I pay £154 a month but am currently using around £85 so am building up credit.

Last winter I was using around £154.

Assuming I use the same as last winter but prices double, I can expect to be paying £300 a month this winter. Let’s for argument’s sake say they more than double, so I’ll be paying £350 a month.

I will receive £400 in government help, plus the £300 I have in credit.

£700 divided by 6 months of winter is about £117. So if my bill is £350 - £117 it will be about £233 a month.

Why in hell would I accept a fix of £400-£500 a month now?

dontpay.uk

Not really a solution.

Prices are going to rise by around 86%, not 400%

Between early 2021 and early 2023, the price rise is going to be 400%, minus some for the £400 bill credit.

If you were paying £100 pm on average early last year, you should expect to be paying close to £500 pm by next year, to keep up, unless you reduce your usage significantly.

We're currently in deficit by a few pounds, having only just caught up with the debt built up last winter when Octopus kept our DD at the level set by Avro, despite the unit rate prices we were paying almost doubling.

Because you're fixing the kWh, not the price of the direct debit
If the fix is cheaper then the variable rate then that's why people are fixing to guard against the January and April rises likely to hit

Is it like you the government will do something? I know lots of people on here can afford to pay £300 a month on energy but many millions won’t be able to.
Not just a few million, many millions.

I understand that!

But these fixes aren’t cheaper than the variable rate. At all.

Between early 2021 and early 2023, the price rise is going to be 400%, minus some for the £400 bill credit.

I’m talking about from now. Prices aren’t going to rise 400% between now and January.

The price of the kWh is going to roughly double. Therefore how much my energy costs me each month (actual usage) will double.

I believe they will. Only because they’ll have to, but they still will.

@EtnaVesuvius it seems to be so varied at the min
I've fixed, because it's forecast to be cheaper. Used the MSE calculator, looked at the predictions etc. But the fix I went for is version 20 or something and last week it was version 19 which is a totally different rate. Plus varying between suppliers too

Mine is £200 estimated DD and I'm a LOW user, as in my current bills for gas and electric are £60

Forecast is
Up 80% October
Up 31% January
Up 15% April

The issue is that people coming off fixes now, are still paying the low rates of 2021, before the market became volatile.

This is why people are seeing DD estimates that are so high, particularly for fixes, which now higher than the price cap - reflecting actual market conditions (the price cap has a lag).

@Mumtofourandnomore definitely
I got a really low fix and debated whether to fix for 1 or 2 years (I picked 1 year)
By the time I had done it and rang my dad to get him on it, they had pulled the offer and that was end of sept last year