Fix for 24 months at higher rate or 12 months for less?

Carey_Nic

Hello everyone,

Our first post so please go easy .

Looking to switch from our current supplier (npower) for both elec and gas who's fixed period ends in April:

We have 2 options which we are comparing but need a little bit of advice on:

1/ Fixed for 12 Months
Avro
Save ~£519per year
Monthly cost £102.00
No early exit fee

or

2/ Fixed for 24months
Scottishpower
Save £457 per year
Monthly cost £107.27
No early exit fee

Basically fix for 12months at £5 less a month or fix at 24months at £5 a month more ultimately costing us £120?

So the question is, do we forecast another price increase of +5% on tariffs over the next 24 months or so on top of the current increases (I know it is more complex than that)?

Hope this makes sense?

Thanks

[Deleted User]

Well gas prices have risen by less than electricity in the past year. But will this continue? Nobody knows, so it depends if you feel happier fixing for 2 years.

Have you tried to calculate what happens if you have a hard winter and use lots more gas for heating or less? Ditto for electricity.

And have you looked at using separate suppliers for gas and electricity as that can be cheapest. (it is for me)

Carey_Nic

Thanks for the reply, going to look at the Gas tarifs and compare now as you have made a very valid point.

usage wise - Elec is pretty static (excuse the awful punn), Gas is more variable for us.

footyguy

No one knows what the energy prices will be in 12 months time, so it's a gamble.

However, if you want the surety of knowing what you'll be paying for the next 2 years (assuming your consumption estimate was correct) then choose the 24 month fix.
The cost of doing so? £60 in the first year.

(you actually need to be thinking prices will rise by >10% over the next 12 months just to break even)

Have you considered seperate suppliers?

ASavvyBuyer

Have a look at Zog Energy for gas.

For us a two year fix was only about £6 extra per year compared to the one year fix.

They may not be the absolute cheapest, but the customer service is 1st class. So much so, that we have recently helped an elderly relative also start the switch to them when their E.on Collective finishes soon.

It's a shame they don't do electric too, but rumours are they might by next year.

AndysDad

I would be very surprised if you were going to save that sort of money.Don't forget when they calculate those saving ,they are comparing costs against you not switching at the end of your current
term and automatically going onto a 'Standard tarriff.
I always look at the tarriff and calculate the savings looking at my annual usage.

SpotlandRules

If you do go with SP, remember that you can change between their tariffs free of charge, so if a cheaper SP tariff does appear, you can swap over with no penalty.

Pincher

If you want an easy life, and don't have to deal with it, get a two year fix.

I always go for one year fixes.

The underlying assumption is you can tariff hop as cheaper ones come along, and just stay put if it's more expensive. This makes it rather difficult to be with E.On, which offers cheap tariffs through external parties, so E.On doesn't have to tell you about them. You have to know when, with whom, and sign up at just the right time. Scottish Power makes it a breeze to change tariff.

So, one year fix means frequent checking, and you get rewarded by paying less, for spending your time. If you tariff hop from two year fix to two year fix, every few months, you are wasting time AND paying more.

If you are lazy, get a two year fix, and DON'T look at it until two years are up.

If you want to fiddle with it, and keep checking, you might as well get a one year fix.

Blackbeard_of_Perranporth

I am currently fixed with SP until December 2018. It was £5 a month more than the July 17 fix at the time. The advantage of this recently is that SP has raised their prices, but my tariff is not affected.


Over the years SP have allowed me to move for free within their tariffs should better deals be available, and I did so up until last October. If a better deal comes along in two years, and prices fall, I can move again for nothing.


And all for the price of two wobbeales a month in the Bridge!