Pros and Cons of Fixed tariff?

apt

A fixed tariff can be either economy 7 with peak and offpeak rates for electricity or a single rate.

myright

oh ok..so you think as the prices are going up, it'd be better to bag a few years fixed rate?

apt

If you are worried about gas or electricity prices going through the roof go for a long term fix. But on balance you'll probably end up paying a bit more than taking a series of shorter term fixed rates picking up cashback as you go.

peterx

These EDF and Npower 2017 fixes are way to high.People are panicking.To get any benefit Gas and Electricity would have to rise a minimum of 10% annually.Government will step in shortly to stop this as what is proposed in Wales.The power companies are being very clever pushing these fixes as they know they will profit from these fixes.

NittyGritty

peterx wrote: »

These EDF and Npower 2017 fixes are way to high.People are panicking.To get any benefit Gas and Electricity would have to rise a minimum of 10% annually.Government will step in shortly to stop this as what is proposed in Wales.The power companies are being very clever pushing these fixes as they know they will profit from these fixes.

what you fail to realise is, that take SSE for an example, just because its hiked prices to 8.2% the actual True unit prices will no doubt be in the region of double for some if not more, so your looking way more than 8.2% rise annually

if you want proof, take a look back on a thread when npower gave an official hike last year, some were paying around 30% increase.
just ask those on variable deals (cheapest) when they get the letters through post informing them on the new unit costs come DEC

peterx

Still don't think the government will allow much more and don't understand your double price increases.

NittyGritty

peterx wrote: »

Still don't think the government will allow much more and don't understand your double price increases.

if you look back on last years threads the price hikes by some of the top 6 were infact much higher in real terms of the official figure given.when you worked out the new unit prices.

just taking the official figures and you coming out with for long term fixes to be viable it would need to be 10% year on year, when infact the true costs of price hikes are more than likely to exceed the official figure for example SSE 8.2% to much more than 10% and way beyond when people get their official letter with the new unit prices on them

peterx

I think what you are saying is it depends on the tariff individuals are on.I am on EDF April 2014 fix.So no way would the 2017 fixes help me or indeed be a good bet.

NittyGritty

peterx wrote: »

I think what you are saying is it depends on the tariff individuals are on.I am on EDF April 2014 fix.So no way would the 2017 fixes help me or indeed be a good bet.

what would your unit price be in 2014? then again in 2015, and then 2016 with increased hikes every winter as predicted,maybe it wont help you but then again? when it comes to picking a new deal in 2014 your unit prices will be higher that's for sure.

not saying long term fixes are for everyone but for me I think it ive made a wise choice, esp when I take into account my night rate, its currently 5.7p when npower kicks in, considering most are already in their 6p a day night rate, or 7p and some already nearly pushing 8p mark and yes that's THIS YEAR alone,id hate to think what my night rate would be year on year until 2017

you just got to do the maths on the True figures of increases rather than rely on the official figures and go on that, as the official figure is nowhere near the true unit costs when the hikes kick in. some think oh its only 8.2% for example,until they look into it closer and realise their unit prices have risen by much more than that when they get letters confirming their new prices for those on variable deals (cheapest)

when it comes to switching in april 2014 most of the current deals would have finished and replaced by new tariffs with an even more expensive tariff than they currently are.as each new tariff is a price hike in itself, (so assuming you made some comparions now to see whats out there) to see how much more expensive it will be to switch now or in april will become even more expensive come april with new tariffs around

Pincher

I have been doing short term fixes for years.

Energy companies can buy futures contracts up to 18 months ahead. The overall cost of an 18month tranche can be up and down from tranche to tranche. If you have a look on uswitch.com

For Consumption of:

Gas 25,000kWh
Electricity 3,000kWh

Scottish Power Online Fixed Energy tariffs:

£1,401.65 March 2015 (31st March 2015)

£1,406.00 December 2014 (31st December 2014)

With these tariffs, Scottish Power doesn't have to pad it higher, because they are fully covered within the 18 month period.
Not so with the long fix to 2017:

£1,642.62 Help Beat Cancer Fixed Price Energy January 2017


£241 extra PER YEAR! As the bulk of the energy is used in the winter period, and the March 2015 fix covers TWO winters, I would save £480 by choosing the shorter fix for the first two winters.

Assuming prices go up by 8% per year, £241 is 17.2% above the March 2015 price, so after two years, the normal price will be the same as the January 2017 price. So by taking the March 2015 fix, I will start paying the same as those who take the long fix now from mid 2015, but having paid £480 less compared to the suckers.