Fuel costs - Fixed rate vs variable? OVO fixed more expensive than variable?

[LivingInaBuildingSite]

Generally I thought it was better to go with fixed rates, and have always signed up for the 2 year deals.

(Switched to OVO from Eon a couple of years ago)

Currently pay somewhere between 220/320 a month - I vary the DD depending on time of year and how the balance is looking.

Ovo now saying an estimated monthly cost of £575 on their ‘loyalty’ fixed rate plan. I know fuel costs are going up but that seems huge!

And, confusingly, the variable (if you do nothing and don’t select a plan you end up on this and I always thought that was meant to be the worst one) is estimating £295 a month.

Obviously I know the variable can change, but even if it went up to £575 I’d be no worse off. And I could change to a fixed rate plan later if I wanted to.

Or should I switch company again?

Also, Ovo installed a SMETS2 smart meter that has never done anything smart. And they never gave us a display unit. Won’t send anyone out to look at it because of covid. So just a new meter x 2 then.

Thanks for any thoughts.

At the moment there are no cheaper fixed rates. The variable rate is covered by the price cap which is why its cheaper. The price cap will go up in April though

I'm not taking a fixed rate when my deal ends in a couple of weeks and will go onto the variable rate instead

P.s. you are unlikely to get a better deal by switching either as their best deal will also be the standard variable rate

Yep I think you’re right.

And MSE says most people should probably stick with variable.

It just feels wrong not to sign up to a fixed.

But the MSE says fixed is potentially better if the price difference is 40% or less. My Ovo numbers are way over that.

Guess I’ll roll onto variable and see what happens in April.

Hoping the building work will finish then too which should warm up the house, as well as the weather improving.

Hold fire and keep an eye on Martin Lewis' social media.

It used to be the case that a fix is cheaper, but not recently. We need to get over it 'feeling wrong' and not panic into fixing at a rate way over the price cap, which gives some protection from the current high wholesale prices.

Thanks both, I will keep an eye on Martin Lewis and resist my inner temptation to jump on the fixed rate!

I see you are already following ML MSE. For anyone else with this dilemma here is Martin Lewis' money program which explains this in full.

www.itv.com/hub/the-martin-lewis-money-show-live/2a1827a0119

if you fix now, you're potentially going to be paying the higher rates over the summer when energy is cheaper. Stick to the variable then see what the situation is in April.

I thought the next fuel cap was being revised mid-February?

I'm on the variable rate too; like you, OP I'd also fixed every year & it's weird to be entering meter readings monthly & paying by debit card.

So my fixed rate ends tomorrow.

Last chance to get another fixed rate deal and I’m having a last minute dither.

I pay £310 a month DD atm.

The best Ovo can offer me is fixed for 2 years at £647 a month.

Their deal for new customers is £649 a month so not a great loyalty reward.

Currently the rollover onto variable states £296 a month.

I think I’m still best at not going for fixed. Whilst accepting the £296 a month is not going to reflect reality.

WWYD?

Have you worked out what your annual bill should be based on your usage at the different rates, to check that these monthly payments are correct?

Your bill is very high, do you have a large house and do you need to use so much or is there anything you can do to reduce consumption?

I don't think I'd go for a fix at that price but without seeing unit rates it's impossible to judge.

I think there is no easy answer. Unfortunately fuel prices are going up massively and the fixed price offers are very high. I was paying £160 and have yet to receive a new DD amount since my supplier went bust last September. I have no option to fix but looking at my current supplier I could pay £482 a month for a fix. Bit tricky when I still need a bill from my failed supplier.
I think the answer is to try and reduce usage as much as possible. Not sure how sustainable this will be; it’s not a good idea for houses to be unheated.
Fuel poverty is much higher than the headline rate. Mine could be 25% of my income.

Thanks both.

It is a big house, 5 beds, 3 floors. We’re a family of 5, plus an electric car.

Plus, we’ve had builders here for nearly a year knocking the back off and it’s still not properly heated so it’s cold. So we have had an electric radiator on a lot.

I’ll look at our annual usage and see what it says. Hoping our usage actually drops anyway as the house becomes more ‘sealed’ even though it’ll be bigger. Certainly next winter should be warmer, even before we turn the under floor heating on 🤞

I tend to be the person that walks round turning stuff off already but do think I need to do it more, and get the others on board too.

Mines showing as my current usage would be 150 pm variable
220 fixed.

I'm taking the chanve stay on variable.

Well today is the day and I haven’t signed up to the fixed rate so it’s 🤞time!

I did look at my annual usage for 2021 (bearing in mind WFH, Home schooling on and off & building works which impacts on many levels, like limited access to a washing line so more tumble dryer usage, etc.):

So usage last year:

Electricity 10435.15 kWh £1633.04

Gas 29839.16 kWh £743.55

Total cost: £2376.59