BG is it worth paying the extra 5% to 'fix' tariff until 2013?

fairihell

Just looking at trying to reduce our bills but as have gas on direct debit and electric on a pre-payment meter we cant get the 'duel deals' anyway (landlord wants to keep the meter in) - so by doing the searches for the fixed offers it says we are better off staying with british gas but gas is going up 18% and electric 16% on 18th August but the fixed deal (on both gas and electric) is 5% on top of that price.... so big premium.... i know the prices have already gone up this year so will they really continue to do so? is the extra 5% on top going to be a good deal in the long run??

currently paying £40 direct debt on gas and £50-60 electric on meter

could change the gas to a web deal which would be a bit cheaper, but only until the prices go up again...

waht have you done? was trying to bring costs down but by doing this will be more..... but is it better inthe long run??? argh please help!

wolves062347

Ive just switched to their online 4 saver, or somet like that! it is a minefield though. Especially be careful with the websaver tarrif because the 6% discount doesnt actuallyh kick in until you start using the teir 2 part of your energy.

Still not convinced that the prices will rocket again, but surely theyll have another price fix menu when that happens?

broxis11

I`m one Websaver 11 and will be leaving the UK in October so haven`t been overly concerned about the increases. If I was staying I would definitely go for a fixed deal of some kind.

Do you think the prices will go up more than 5% between now and March 2013? Bear in mind that BG have moved 25% on gas and 21% on electricity since December last year.

eurmalian

broxis11 wrote: »

Do you think the prices will go up more than 5% between now and March 2013?

It's not quite that simple I'm afraid. Remember that you also have to take into account that you will be paying more until the prices go up.

For example, if prices go up 10% in August next year, you pay 5% extra for 12 months and then 5% less for 7 months. Overall still a loss even though the prices did go up by more than the five percent.

The longer it takes for prices to rise, the more they have to go up by to make a fixed price deal worth it.

I'm not saying that they can't often be a good idea, just that it's not quite as simple as you make it appear...

broxis11

eurmalian wrote: »

It's not quite that simple I'm afraid. Remember that you also have to take into account that you will be paying more until the prices go up.

For example, if prices go up 10% in August next year, you pay 5% extra for 12 months and then 5% less for 7 months. Overall still a loss even though the prices did go up by more than the five percent.

The longer it takes for prices to rise, the more they have to go up by to make a fixed price deal worth it.

I'm not saying that they can't often be a good idea, just that it's not quite as simple as you make it appear...

This is true. My advice would be to consider switching to a more competitive fixed deal.