Why the Fix ?

keith1950

Hi StevieJ, I haven't checked the scottishpower tariff in question however when comparing tariffs it is important to compare with the actual useage figures.

As an example ,when I picked my current 2 tariffs I also checked the same tariffs using my mothers useage figures and whilst they were and still are the cheapest for me they were in no way the cheapest for her.

So it's no good finding youself the cheapest tariff and then advising everybody that its the cheapest, the cheapest will vary with useage level.

I have found that average useage figures are probably a good general guide to the cheapest tariff but anyone who has particularly low or particularly high useage will find the results are different, so it is essential to input the actual kwh figures for anybody considering switching.

That could account for the difference you mention above, you may have completely different useage levels to Gerrard.

kar999

When I looked at fixing I was only really locking in at the new increased prices much in line with my Scottish Power Online Energy Saver 10 (post 1 Aug increase) and was also faced with new exit penalties.

I've therefore decided to switch to the Coop (I'm only on Electricity). Based on my consumption my savings are £101+£50 offer discount = £151. The Coop will no doubt put up it's prices but they would have to increase by 47% before I'm out of pocket. (SP new prices £473 versus Coop £322 incl discount = 147%). As there is no exit penalty with the Coop I can also look to switch again at any time if they become uncompetitive.

I'd like to think the Coop wont increase it's prices by that much during the next two years but even if it does, and until such time as it happens, I'll still start clocking up some of those annualised savings of £151p.a. from day 1 when my switch goes through at the end of this month.

Only time will tell if it's the right choice.... but I'm going for Jam today.

StevieJ

keith1950 wrote: »

That could account for the difference you mention above, you may have completely different useage levels to Gerrard.

Even so I don't see how it is 'behaving like headless chickens' to transfer to a three year fixed rate that is £70+ cheaper than the cheapest rate being offered by my current provider Scottish Power.

Gerrard_8_lfc

StevieJ wrote: »

I assume SP direct is Scottish Power and OS7 is EDF. I am currently with SP and EDF 2014 is cheaper for me than any of the Scottish Power tariffs, so how does SP save you £80?

My consumption is 20000 kwh Gas and 5200 Kwh Elec in the Scottish Power region.

SP Direct 2012 Tariff was £80 cheaper than the new OS7 prices. EDF v2 fixed was another £40 a year higher and EDF 2014 was £110 per annum more expensive than the revised OS7 prices.

So the Direct tariff seemed like the better option Saving me £80 against the revised OS7 prices so happy days. SP withdrew the Direct tariff within the first week.

StevieJ

Gerrard_8_lfc wrote: »

My consumption is 20000 kwh Gas and 5200 Kwh Elec in the Scottish Power region.

SP Direct 2012 Tariff was £80 cheaper than the new OS7 prices. EDF v2 fixed was another £40 a year higher and EDF 2014 was £110 per annum more expensive than the revised OS7 prices.

So the Direct tariff seemed like the better option Saving me £80 against the revised OS7 prices so happy days. SP withdrew the Direct tariff within the first week.

No wonder it is not on my uswitch comparisons if it doesn't exist, so you are suggesting that people are behaving like headless chickens for not switching to a tariff that has been withdrawn

backfoot

StevieJ wrote: »

No wonder it is not on my uswitch comparisons if it doesn't exist, so you are suggesting that people are behaving like headless chickens for not switching to a tariff that has been withdrawn

What comes across is that for each of us,our own consumption level is critical at the time of the switch comparison. Only that provides the best option to review the key decision points.

1. What are the best variable prices. (do they include recent increases).

2. What are the best fixed/capped prices?

3. What are the length of the fixes/caps?

4. What are the premiums payable to fix/cap? Percentages are a good guide.

5. What are the expectations about future price rises/decreases?

It is important to understand how to model the fix versus variable question. Using simple cash flow techniques allows you to understand the advantage /disadvantage for each scenario.

Inherently,given there are assumptions there can be no right or wrong answer and the decision process often depends on the individuals attitude to risk.

For my own supply,at the time of switch, the SP Direct offer was clearly the best option for me as it was for Gerrard. For my relative, on much lower consumption levels, I recommended EDF 2014 Fix, as the premium was less and his attitude to risk is lower than mine.

I think Gerrard's original post was aimed at those people who automatically jump on fixing bandwaggon without really doing the sums properly or understanding how the payback is calculated.

StevieJ

I think what is more important is the timing i.e. pre or post the new batch of price increases, methinks that the SP Fixed 2012 (as per Gerrard) was based on the old prices, so well done for getting in early. At the current state of play it seems that the EDF tariff is also based on the old prices, so probably leaves it high and dry as the most competitive tariff at the moment, based on the one assumption, that prices will increase in the future (not a gimme, but reasonable all the same). I suppose what I am saying is the choice that you and Gerarrd made is no longer an option i.e. if you and your relative had to make the decision today, it is possible that you would both agree.

backfoot

I don't think Gerrard was criticising your choice which sounds well thought out.

I agree timing is an important issue depending on product choice.

I think he was making a valuable point that the frenzy towards fixed is not as simple as it may first appear. Each of us is advised to do their sums before deciding.

In different scenarios, I made different choices.

I do however,start at the point that these Fixed products are generally not offerred to give us something for nothing. They are not offerred to make us any profit,that is.

keith1950

Even so I don't see how it is 'behaving like headless chickens' to transfer to a three year fixed rate that is £70+ cheaper than the cheapest rate being offered by my current provider Scottish Power.

Hi StevieJ, I am sorry if I did not make myself clear in my posts.

I was not criticising people who keep abreast of the situation, do their research and then make an informed decision.

My criticism was aimed at people who hear that everyone is fixing and then blindly follow suit not knowing what they are doing, they seem to have tunnel vision and become obsessed that they must have a fix.

They don't do any research , probably do one comparison site using £'s instead of kwh and end up paying more.

To get it right it can take a bit of time and effort.

Gerrard_8_lfc

Hello,

As backfoot stated I was referring to people who are now not taking time to think about there options and are only opting for expensive fixed price products i.e SSE Fixed price 7 or BG 2013. EDF's fixes are more reasonable than most but with my higher consuption they tariffs were expensive compared to the one I have opted for.

Cheers