Energy prices....what to do?

[Oopsididitagaintomorrow]

Currently with Octopus paying £170pm, once yesterday's payment is entered on account I will be £70 in credit.

With the winter coming up my gas is no longer going to be averaging £17pm, and with the higher usage and £170 payments, I will quickly go into debt rather than credit.

Fixed tariff for a year is being offered at £170.83. I want to fix for the year just so we can have heating on and not have to worry, however DH says we would be better on the tracker tariff we are currently on.

Not going to lie I'm not clever with these things, so asking for some advice, what would you wonderful mumsnetters do?

You need to see what the unit price is for gas and electric for both tariffs to see which one would be cheaper. Even on a fixed tariff your DD can go up each month if you use more energy and go into debt.

A fixed tariff does not mean 'use all the energy you can for that price'. It merely means that the price per unit is fixed, if you use more you will pay more. The £170 will be an estimate of what you will pay based on historic usage.
What are the unit prices for the fixed tariff?

Do what you can now to get your home winter ready! Warm duvets, extra blanket on the bed( we use a top sheet in the colder months as it keeps the heat in) blankets on sofas in the evenings, draught excluders at doors, timer for showers, look at ways to cut down your usage if you’re worried about how much it will cost.

Heat one living room? This is what we did growing up in an old draughty farmhouse. The room with the stove was the only truly warm room.

These are the two tariffs, tracker we're on now and fixed tariff x

This.

You need to look at the cost per kWh and standing charge from both tarriffs. Go with the lowest.

You cannot go by the direct debit amount. It is a best guess of your usage. And fixed doesn't mean "you can heat as much as you want for 170", it means "we won't change the price over unit, this is what we think you will use".

Bit like saying apples will be fixed as 10p each. But your household apple bill, where you each eat one a week will be lower than ours where we each eat one a day.

Should add that’s what we do now but we do have heating in the rest of the house on a timer. We light the fire in the living room in winter and everyone gathers there for the evening. We joke it’s the only time of year we’re all in the same room. When it’s not cold we are spread out all over the house. The kids still use their rooms but wear oodies if they’re cold. We have oil central heating in the rest of the house - it’s just too expensive to have it all all the time!

As PP says, find out what you're paying.

You have a Standing charge each for electric & gas, and unit price each for electric and gas.

Fixing means you'll always pay the same standing charge and unit price for the term of the deal (1 year, for example).

The standard rate is not necessarily the cheapest, or the most expensive rate but for the past couple of years there's been no choice! I always used to fix every year and get cashback when I switched.

Prices are due to fall 1st October. I plan on doing a search after that, to see what deals are available.

Remember, regardless of the costs /deal, you'll always pay for what you use - so, if you fixed and paid £200 per month via direct debit, if you use more than what they've estimated, then you'll still need to pay more.

Prices are such a rip off still!!!

I'm in the same position re Octopus - going off my tariff tomorrow and having to choose between the 12 month fixed and the variable tariff. MSE has a calculator where you can work out whether you should fix or not. here. I'm going to stay on the variable I think and hope that overall prices decrease in the next 12 months. But I'm no expert!

OK so those screenshots show that that fixed tariff is considerably more expensive per unit than the tracker you are currently on. The unit price and daily standing charges are both higher.

And yes, what the other posters say - your direct debit won't be fixed at that amount, it's the unit price that will be fixed. Your direct debit may change depending on the amount of fuel you use. You are gambling on the unit prices going up or down in the next 12 months if you choose the variable rate rather than the fixed.

I wouldn't fix to that rate, with prices due to come down.

The best comparison is using Uswitch.

You've misunderstood what you're fixing.

You AREN'T fixing to say you can use what you like, and it will cost £170 a month. You are fixing in to say you will pay a set price for every unit that you use, and you won't be affected by any fluctuations in the price (good or bad) within that time scale.

If you use what you like, when fixed or not, your direct debit will increase as your bills will increase.

It looks like you're currently on an old fix? The unit prices of 17.85 for electric and 5 p for gas are quite a lot lower than what you'll go onto so you should expect your bills to rise whatever you do (and please read up on what a fix means, it's not unlimited energy - it's like buying petrol, you agree the price per unit, then you pay according to how many units you buy whether these are in litres or kWh).

What you need to compare is the unit price of the fix with the unit price of the standard variable tariff which is going to change again on Sunday.

I think the Octopus fix is a good one, as in it should be slightly lower than variable over the next year, unless prices get much cheaper than expected next year, as you'll then be on a slightly more expensive fix, but unless prices really drop back, there's probably not a lot in it.

You aren't going to get anything better than the Octopus Tracker tariff at the moment. Unit prices have been much lower than the fixed tariffs since at least February.

@BarbaraofSeville, OP isn't on an old fix, she's on the current Octopus Tracker tariff which anyone can switch to. There's an inherent risk in that daily prices could shoot up, but if you're happy to take that risk and can moderate your usage for that day in response, there's nothing better around at the moment.

(DM me if you want a referral link, we both get £50 credit! But seriously, it is market beating currently)

Are you currently on the octopus tracker that changes daily? Why do you want to move off that tarrif?
It will be quite hard to compare tarriffs against that one, as the price can change so much.

If you need to protect yourself against potential high tracker prices by all means go fixed or for the standard variable.

If you are prepared to play the game, and lower usage on expensive days, the tracker can be attractive.

Ah, yes, I forgot about that tariff and probably misunderstood the OPs point, because so many people talk about DDs being fixed regardless of usage, when they're only fixed if you use the amount they're assuming you do when you set the DD.

However, I think the tracker tariff is quite risky over winter because that's when prices are more likely to shoot up, and also when you're more likely to want the heating on.

You could easily wipe out months of savings if there's a cold snap and the spot prices go up at the same time. Look at the big bulge in the graph that coincided with that very cold snap last December. Imagine being in a position where it's very cold and you're scared to put the heating on because you're twice the unit rate for G&E than you would on the price cap or fixed tariff?

Octopus Tracker Tariff | Energy Stats UK (energy-stats.uk)

The tracked rate you’ve posted is miles better than the fixed one.

If you look at MSE, Martin Lewis predicts that overall prices will be lower at the end of 12 months from now, but that they will increase the next time the cap is fixed in Jan. He also covers the Octopus tracker here and whether it's worth it.

Basically you're gambling on what fuel prices are likely to do over the next 12 months.

Sorry, should have said i know that i can't have the heating on 24/7 and still only pay £170 - i meant peace of mind that the charges/prices will stay the same so we can work out better where we are and not have to worry so much. Didn't explain that very well.

Thank you all, think I will stay on the Tracker for now, and see what the next update brings in November (for Jan-March period) and take it from there

I think you don’t understand what a fixed tariff is. You have a fixed price per unit of energy not a fixed price for as many units as you use.

OP has already said she knows that.