If I fixed electricity tariff, why is my monthly payment going up?

[thelittlestbird]

Hello all

Hoping the MN hive mind can help me as I am confused!

We fixed our electricity with Octopus on a ten month fixed tariff in April. Our monthly payment has been £67ish.

Just had an email to say our payment will go up to £159ish from August.

Why? Does a fixed tariff just fix the kWh unit and day price? In which case, are we really using that much more electricity?!

It does sound as if you're using more electricity than they had estimated when they suggested the monthly direct debit amount. A fixed tariff does indeed only fix the unit price so if you use more you pay more. Have you looked at your account to see how much the energy you're using each month is costing?

Weirdly I've had the opposite problem with Octopus where I didn't think the monthly amount was enough (I was just about covering the costs but in the summer months) but when I used the option to have the amount reconsidered, it came out telling me the current amount was still right.

If you know how much energy you used in the same period last year (Apr 2021 to Feb 2022) you could tot up how much that will cost on the Octopus tariff, add on a bit for contingency in case your usage increases (winter is colder or someone is at home more or similar) and then see if that comes close to what Octopus are suggesting.

Does a fixed tariff just fix the kWh unit and day price

Yes, of course. It's like buying petrol. A price per unit, but the cost varies depending on how much you use.

£67 isn't really very much at current prices, unless your home is small and you don't really use the heating very much so it's not surprising that they are asking for more money.

Have a look at the balance forecast feature in your account (although it doesn't work on iphones apparently) and you can see how much they think your bills will be over the next year and how your balance will vary. If you think the amount is too much, you can reduce it in the account and it will show you the affect, although I don't think it includes the £400 that will be added to the account over the winter.

It might be that your actual use is say £110 per month, so you've underpaid for a while. In this case the suggested £159 will be your usual use, plus extra to cover the debt you've built up.

Might also perhaps be a little extra to build up a credit in advance of winter when you'll likely use more.

Octopus is really transparent.

Have you looked at your account online? You should be able to see how much in £ you're actually using each month. This is the important figure regardless of your current DD. If you're using £67 a month NOW, in summer when it's warm and light, this will go up dramatically from October onwards which would account for the rise now.

If your fixed rate is due to expire in Feb next year then the increase is probably also to take account of the huge rise you'll have from then onwards - I believe Octopus calculate bills based on a future 12 month prediction.

do you put in meter readings each month or do you have a smart meter?

Of course the fixed tariff just fixes your unit rate and standing charge its not a fixed payment pernkonth and use however much your want situation that would be crazy! The increase is probably due to the £67 being too low therefore they need to increase it to cover what you are actually using, plus some to pay off arrears plus some towards the winter as the idea is to be in credit by the end of summer to help pay for the increased use in the winter.

you will be able to see from your account if your current dd covers your usage, which would explain why they want to increase the monthly amount. I am with octopus on a two year fix and my dd is £65 per month, this is actually higher than the amount I use each month and the credit amount carries us through the winter months (fixed in October 21).