Page 5 | That it’s bonkers this is my FIX? Sorry another ENERGY one

Ineedtoletgo83 · 2022-08-27T07:44:39+00:00

I wish I’d fixed in Oct 2021 but on MSE advice I didn’t then. Wow now this is our situation, what can we do? cut down usage is our option. I did the MSE calculator is suggesting I strongly fix at £483 per month. Paying £165 atm due to go to £220. I mean we could reduce our usage but really how much will that affect our bills? large 4 bed semi, dreaded open plan area. Gas central heating. we use 17800 kWh of gas?! and 3744 kWh of Electricity. I wfh 5 days a week. DH two days a week. Kids home from 4ish most days.

Original poster

Ineedtoletgo83 · 27/08/2022 11:09

CredibilityProblem · 27/08/2022 10:48

When you think about it OP, having your misunderstanding corrected is actually good news. The fix you've been offered has a headline cost assuming that your usage remains the same as it was last year. If you take the fix and reduce your usage then your bills will be lower than that "quote".

100% credibility!!

OP posts:

sjxoxo · 27/08/2022 11:09

From what you say your house sounds poorly insulated not well insulated!
Is it a new build ish? They often are quite poorly insulated and thin walls. Have a look at insulation in your loft space and also check your window seals. I expect it’s the open plan and materials of the house that make it quite inefficient. Xx

Ermengarde · 27/08/2022 11:21

We have bifolds and roof windows across the whole back of the house. Without any covering it’s an oven in summer and freezing in winter. Within 6 months of installing them we couldn’t bear it and installed blackout blinds on the veluxes and blackout curtains across the bifolds. The difference is amazing, cool in summer and warm in winter. The curtains all sweep to one side so don’t look too bad even in the kitchen.

Original poster

Ineedtoletgo83 · 27/08/2022 11:27

It’s a late 1950s semi but with a wraparound double storey extension yes with bifolds and roof velix.

OP posts:

hedgehoglurker · 27/08/2022 11:33

While it's possible you have a gas leak, you might not. We are 5 people in a 5 bed, and use 27,000 per year.

Hellybelly84 · 27/08/2022 11:34

If you can afford to pay out for a log burner (if thats an option?) it saves us so much on heating in the winter. It heats up our open plan area so well (kichen/dining/freezing conservatory all knocked through in a 1930’s house) and retains the heat, so the room still feels warm for ages after its gone out. I wasn’t sure about getting one years ago-Husband had to persuade me and so glad we did.

ivykaty44 · 27/08/2022 11:39

I'm asthmatic so no way would I get a log burner or revert to open fires, they really not great for lungs

VanGoghsDog · 27/08/2022 11:39

Ineedtoletgo83 · 27/08/2022 08:55

Yes sorry. I guess I’m thinking fix and use all you want (older house concerned about damp etc but all savings gone!!!) or cut usage which I think we can do to some extent.

Well, that's absolutely not how it works. You'd be fixing the unit rate, not the 'cost no matter what you use'. God, can you imagine the backlash to utility companies if they actually offered that as an option!?

I use 11,000 gas per year.

Try turning the temp down on the boiler, that's taken my gas use down by c2,000 pa. And heat the person not the space, so have an electric heater near you, or heated throw, rather than trying to heat a huge open space where the heat disappears into the roof.

RJnomore1 · 27/08/2022 11:42

WhileMyGuitarGentlyWeeps · 27/08/2022 10:42

@Ineedtoletgo83

It's up to you, it depends what you are paying now obvs. We pay around £100 to £110 a month for gas and electric combined atm (but the figures are lower because it's summer!) Will jump to probably £150 in winter (usually!) I reckon it will be £180-£190 or so with the rise. (This first one in October that is!) So no way would I be 'fixing' at almost £500 a month!

Thing is, some people did this with mortgages, 'fixed' for 5 years at say (for example) 5.75%. And the interest rates went down and they were stuck with the higher amount for another 3 - 4 years in some cases! Whereas if it had been variable it would have reduced. Quite dramatically for some.

My old neighbour in the early noughties fixed his rate at 5.75% or something, and his payment was £550 a month. Then the rates reduced about a year later, and his payment WOULD have reduced to £450! Then it dropped again. Would have dropped another £75.

He fought tooth and nail to get the deal cancelled, but no solicitor in the land would be on his side. It was written in stone. '5.75% for 5 years.' He signed it and agreed to it. So he paid around six or seven THOUSAND pounds more than he would have if he had stayed on a variable rate.

As a number of people pointed out though, he would not have complained if the rates has gone UP! Would he have demanded to cancel the deal so his payments can go up from £550 a month to £650, then up again to £725??? Would he fuck.

SO, just be careful, that's all. I am always a BIT wary about fixed rates.' Depends what you normally pay and how long it's fixed for...

I don’t know if things were different many many years ago but you can buy your way out of fixed rates. The same happened to us in 2010ish eith mortgage rates, the cancellation cost was 1/3 of what I saved by changing to a new rate.

MSE advice is fix if it’s 115% of your current rate or up to 120% if you like absolute certainty

we fixed utilities for 3 years a year ago and mortgage for 5 and I’m incredibly glad. It was higher than variable at the time but you could see how things were going.

RincewindsHat · 27/08/2022 11:51

WhileMyGuitarGentlyWeeps · 27/08/2022 10:42

@Ineedtoletgo83

It's up to you, it depends what you are paying now obvs. We pay around £100 to £110 a month for gas and electric combined atm (but the figures are lower because it's summer!) Will jump to probably £150 in winter (usually!) I reckon it will be £180-£190 or so with the rise. (This first one in October that is!) So no way would I be 'fixing' at almost £500 a month!

Thing is, some people did this with mortgages, 'fixed' for 5 years at say (for example) 5.75%. And the interest rates went down and they were stuck with the higher amount for another 3 - 4 years in some cases! Whereas if it had been variable it would have reduced. Quite dramatically for some.

My old neighbour in the early noughties fixed his rate at 5.75% or something, and his payment was £550 a month. Then the rates reduced about a year later, and his payment WOULD have reduced to £450! Then it dropped again. Would have dropped another £75.

He fought tooth and nail to get the deal cancelled, but no solicitor in the land would be on his side. It was written in stone. '5.75% for 5 years.' He signed it and agreed to it. So he paid around six or seven THOUSAND pounds more than he would have if he had stayed on a variable rate.

As a number of people pointed out though, he would not have complained if the rates has gone UP! Would he have demanded to cancel the deal so his payments can go up from £550 a month to £650, then up again to £725??? Would he fuck.

SO, just be careful, that's all. I am always a BIT wary about fixed rates.' Depends what you normally pay and how long it's fixed for...

This is a little different though, for one thing if you renew on a fix with your current supplier most now have no exit fees so if prices were to drop drastically you could then switch to the SVR or a lower rate fix and you would not be stuck paying premium prices above market rates.

Also, there's the very real risk that Putin is going to squeeze energy supplies further as winter goes on, pushing prices up again (forecast is another 50% rise in Jan don't forget) so if you do fix now and your fix is above SVR as mine would be, you can still work out what the impact of a 50% raise in Jan on the Ofgem price cap would be vs your optional fixed rate now.

If I renew to a fix now with my current supplier, my forecast spend for the next 12 months vs what I paid over the last 12 months will be a massive 282% increase.

If I chose to go with the SVR and that SVR is bumped up 50% in Jan and stays at that level til next Oct, my bills will be 362% more expensive over a 12 month period.

Basically, my best option seems to be #1 fix now (I will essentially be paying a 19% premium on my energy Oct - Jan, but if prices jump 50% in Jan I'll be saving 21% in my highest energy usage months, and if the price cap goes down I can exit onto lower SVR with no fees) and #2 reduce my energy usage so that although my direct debits will remain the same, I may be building up some additional credit on my energy account that will come in handy later on.

You do need to run your own numbers and know your energy usage and predict for different price scenarios, but if you wait til the next price cap update to fix, prices will almost certainly be higher again. There's no way to know what's coming in terms of supply, prices, additional government assistance etc but I think I will probably be fixing now and hedging my bets til Jan...(and buying an electric blanket!)

Original poster

Ineedtoletgo83 · 27/08/2022 11:59

MSE advice changed to 140% photo attached

That it’s bonkers this is my FIX? Sorry another ENERGY one

OP posts:

KangarooKenny · 27/08/2022 12:00

When this increase was first announced my offer was to double my DD to £500pm. My offer now is £800pm. There’s no way I can afford to fix on that. I have no choice but to stay on variable.

Original poster

Ineedtoletgo83 · 27/08/2022 12:00

Sorry 145%! It’s madness

OP posts:

latetothefisting · 27/08/2022 12:02

OP it seems to be the open plan area that is costing you a fortune. I would pretty much accept that is going to be cold over the winter. Maybe set your thermostat to 18, so the bedrooms etc will be warm enough, and reduce the time the heating is on for (maybe just half an hour in the morning when everyone gets up - if you're rushing around getting ready for work/school you'll be naturally warmer than if you're sitting still.

If you WFH move to the snug or to a bedroom for the winter so you can just heat that room and not the whole house - I wfh the last 2 years without ever turning the heating on during the day, just wore a thermals, thick hoodie (hood has to be up!), and used an electric blanket/whacked on an electric heating for a few mins an hour, and it was honestly fine. Got up and moved around every 40 mins or so as is recommended anyway and did a few jumping jacks or whatever to get the blood flowing!

Then use your snug as the living room in the evening, and maybe only keep the heating on from 5-7 - it should retain a bit of warmth. You don't need it going full blast until 10 if you're all going to bed shortly after. Use hot water bottles and snoodies to snuggle up in. If your oven is in the open plan area make sure you leave the door open once you've turned it off so the remaining heat warms the room.

VanGoghsDog · 27/08/2022 12:11

WhileMyGuitarGentlyWeeps · 27/08/2022 10:42

@Ineedtoletgo83

It's up to you, it depends what you are paying now obvs. We pay around £100 to £110 a month for gas and electric combined atm (but the figures are lower because it's summer!) Will jump to probably £150 in winter (usually!) I reckon it will be £180-£190 or so with the rise. (This first one in October that is!) So no way would I be 'fixing' at almost £500 a month!

Thing is, some people did this with mortgages, 'fixed' for 5 years at say (for example) 5.75%. And the interest rates went down and they were stuck with the higher amount for another 3 - 4 years in some cases! Whereas if it had been variable it would have reduced. Quite dramatically for some.

My old neighbour in the early noughties fixed his rate at 5.75% or something, and his payment was £550 a month. Then the rates reduced about a year later, and his payment WOULD have reduced to £450! Then it dropped again. Would have dropped another £75.

He fought tooth and nail to get the deal cancelled, but no solicitor in the land would be on his side. It was written in stone. '5.75% for 5 years.' He signed it and agreed to it. So he paid around six or seven THOUSAND pounds more than he would have if he had stayed on a variable rate.

As a number of people pointed out though, he would not have complained if the rates has gone UP! Would he have demanded to cancel the deal so his payments can go up from £550 a month to £650, then up again to £725??? Would he fuck.

SO, just be careful, that's all. I am always a BIT wary about fixed rates.' Depends what you normally pay and how long it's fixed for...

Fucking energy rates is nothing like fixing mortgage rates, that analogy is totally pointless.

Many of the energy fixes have free cancellation anyway, or very low fee, like £30

RincewindsHat · 27/08/2022 12:13

Ineedtoletgo83 · 27/08/2022 12:00

Sorry 145%! It’s madness

That is also not a perfect calculator, my rates over the last 12 months have been so low MSE's calculator is screaming in red at me about not accepting the new Ofgem price cap rates because they're 202% over my current rates. But I don't have a choice about that now, do I? You have to know your own numbers, I keep seeing a lot about bills doubling but mine are going to more than triple the way things are going, purely because I've been enjoying what has apparently been very cheap energy the last 12 months.

psychomath · 27/08/2022 12:15

OP just in case you're still confused (and I agree with whoever said above that it is confusing and the companies deliberately don't clarify):

On both a fixed and variable tariff you pay for each unit of energy that you use. The difference is that on a fixed tariff the cost per unit will be fixed at (say) 60p for a set period of time, say two years. And on a variable tariff the cost will be (say) 50p per unit, but that can change depending on the price cap, which is set according to the cost of energy worldwide. So you might choose to go on the fixed tariff and pay 60p and I might choose to go on the variable tariff and pay 50p, so it looks like I'm getting a better deal. But then if the price cap goes up next month I might have to pay 80p while you're still only paying 60p. It's like making a bet - if you think the price cap will go up by a lot then you're better off fixing, and if you think it will only go up by a little (or even go down) then you're better off sticking with the variable tariff.

In both cases you also pay a standing charge, which is a set amount that you pay per day on top of the unit cost, just to maintain the gas/electric supply to your house. It's currently less than £1/day for gas and electric combined so most of your bill comes from the energy you actually use.

When people say "the price cap is going up to £5000" or whatever, what they actually mean is that the 'average household' on the variable tariff is predicted to have energy bills - the usage cost plus the standing charge - of £5000 per year. You might be paying more or less than the 'average household' depending on lots of factors like the size of your house, number of people living there, how warm you keep it, whether you decide to reduce your usage because of rising costs etc. The price cap is only a cap on how much you pay per unit, the annual figure is more like a guideline to help you estimate what kind of figures you might be paying if you use a 'normal' amount of energy.

When you get a monthly bill from your energy company they estimate how much they think you'll have to pay over the whole year, based on your tariff, your previous usage habits, whether they think the unit price will go up or down (if you're on the variable tariff) and so on. Then they divide that by 12 and bill you an equal amount each month. So say they think you'll use £100 worth of energy per month in the summer and £300 in the winter, they'll send you a bill for £200 every month of the year, to make it easier for you to budget. If your actual usage is £150 per month then at the end of the year you'll be £600 in credit and they'll bill you less the next year, and if you actually use £250 then you'll be £600 in debt to them and they'll bill you more. In the end, you still pay for the amount you actually use regardless of how accurate their estimate is. That's why it's important to send regular meter readings (if you don't have a smart meter), otherwise you could end up in lots of credit or debt without realising.

So in summary, the only way to keep your costs down for certain is to reduce your usage. You might also pay less on a fixed rate compared to a variable one, but that's a guess because it depends on what happens to the energy market across the world.

psychomath · 27/08/2022 12:18

PS I'm not suggesting you should go with one or the other option, that's up to you to decide based on your situation, just explaining how the system works.

NoWordForFluffy · 27/08/2022 12:19

RincewindsHat · 27/08/2022 12:13

That is also not a perfect calculator, my rates over the last 12 months have been so low MSE's calculator is screaming in red at me about not accepting the new Ofgem price cap rates because they're 202% over my current rates. But I don't have a choice about that now, do I? You have to know your own numbers, I keep seeing a lot about bills doubling but mine are going to more than triple the way things are going, purely because I've been enjoying what has apparently been very cheap energy the last 12 months.

Show quote history

If you're coming to the end of your fixed rate, you need to use the rate you'll be moved to as the comparison, not your current rate.

Original poster

Ineedtoletgo83 · 27/08/2022 12:19

Thank you @psychomath for your comprehensive response. I think for some reason DH and I got muddled. I think we are going to aim to ‘shut down’ the open plan area (bar the corner I work in) the corner I work in is in the old house and I can Oodie/blanket up. Plus I think time for some additional insulation.

OP posts:

Original poster

Ineedtoletgo83 · 27/08/2022 12:20

Definitely moving to the front room is going to best.

OP posts:

Original poster

Ineedtoletgo83 · 27/08/2022 12:22

I am comparing my current SVR with Sainsburys Energy with the new FR I’m being offered. It’s 120% higher and I’m being told to strongly consider it based on my current usage. However this will and has to change. I think reducing our consumption/usage is our best ‘bet’. And I guess that’s what we’re all doing just betting.

OP posts:

psychomath · 27/08/2022 12:25

No worries - I didn't understand it either until a few years ago, when I discovered I'd accidentally got myself into about £750 of credit (thank God it was that way round and I wasn't in loads of unexpected debt!) and decided I'd better be a bit more responsible and get my head around how it all worked

ConsuelaHammock · 27/08/2022 12:35

Heat bedrooms for an hour before you get up and an hour before you go to bed. Turn the thermostat down and wears lots of layers.Make sure one room is warm and use it in the evenings. Could you fit a stove in the open plan area?
We have expensive oil central heating and this is how we have always heated our home. We have a coal fire in the living room with a back boiler to heat water in the winter.
I think open plan living will be a thing of the past as it’s really not a suitable way to live in our climate.

ancientgran · 27/08/2022 12:35

My offers to fix are usually for a year so if you'd fixed last October you'd probably be coming to the end of it now and you'd have been paying more over the last year as the fixes last October weren't cheap. I know some people seem to get 2 years but I never seem to.

My fix ended in April and a new one started so I've been over paying the cap since April but will be paying way less than the October level. I dread to think what next April will bring.