How do variable tariffs work?

PhilStation

Morning all,

We can switch from our current supplier without penalty on the 10th Feb and I am looking at Out Fox the Market's variable tariff. We have been with our current supplier (Flow) since the MSE switch back in March or so in 2017 on a fixed tariff. I have switched suppliers every time I have got to the end of my fixed term but have never had a variable tariff. I have looked at the newly offered fixed term tariff from OFTM but I am reluctant to lock myself in for 18 months.

So, my question is, how do variable tariffs work, by which I mean, when will I know how much I am paying for the month ahead? Any advice would be appreciated.

Thanks in advance!

System

PhilStation wrote: »

Morning all,

We can switch from our current supplier without penalty on the 10th Feb and I am looking at Out Fox the Market's variable tariff. We have been with our current supplier (Flow) since the MSE switch back in March or so in 2017 on a fixed tariff. I have switched suppliers every time I have got to the end of my fixed term but have never had a variable tariff. I have looked at the newly offered fixed term tariff from OFTM but I am reluctant to lock myself in for 18 months.

So, my question is, how do variable tariffs work, by which I mean, when will I know how much I am paying for the month ahead? Any advice would be appreciated.

Thanks in advance!

They work in the same way as fixed tariffs. Let us say that your projected usage for electricity is 3000kWhs/year which equates to a cost of £360. Your monthly DD payment will (should) be set at £30 per month. If your actual usage is in line with your projection then you will pay £360 for a year's electricity PROVIDED.....

Variable tariffs are just that variable. The supplier can change the tariff at anytime. However, it is required to give you written notice of any change that increases the cost to you. You then have to decide whether to accept the increase or switch away without penalty.

It is worth pointing out that a number of suppliers now offer just one variable tariff. (Bulb for example). As suppliers they must be very conscious that if they increase their prices by a large margin it will be followed by a large exodus of customers.

PhilStation

Ah I see, so the DIrect Debit would be fixed but if the costs change, that may required the amount to be recalculated.

System

PhilStation wrote: »

Ah I see, so the DIrect Debit would be fixed but if the costs change, that may required the amount to be recalculated.

Yes - your monthly DD would be based on 1/12 of your projected annual cost. It may increase/fall when reviewed later in the year when actual usage is compared to forecast usage. If the tariff changes, then the supplier will provide you with a revised projected annual cost along with a revised monthly DD payment.

The example that I gave of a total cost of £360 per year is based on my contract with Bulb. I am paying them £30 a month. My usage is slightly lower than expected so the DD may be revised downwards in 3 months time provided Bulb doesn't increase its single SVT cost which it is reviewing in March. This supplier gives 60 days notice of any change so to all intents and purposes my tariff is fixed until May.

PhilStation

That's really helpful, thank you.

footyguy

PhilStation wrote: »

Morning all,

We can switch from our current supplier without penalty on the 10th Feb and I am looking at Out Fox the Market's variable tariff. We have been with our current supplier (Flow) since the MSE switch back in March or so in 2017 on a fixed tariff. I have switched suppliers every time I have got to the end of my fixed term but have never had a variable tariff. I have looked at the newly offered fixed term tariff from OFTM but I am reluctant to lock myself in for 18 months.

So, my question is, how do variable tariffs work, by which I mean, when will I know how much I am paying for the month ahead? Any advice would be appreciated.

Thanks in advance!

A variable tariff is one where the supplier can change the prices at will, subject to

14.3
If we make changes to this contract that are disadvantageous to you, we will give you 30 days’ notice to let you know about the changes. If you do not agree with the changes, you can switch to another supplier without paying a termination fee.

But there is no early exit fee applicable to their variable tariff anyway.

Even if you took the fixed tariff, you can still leave mid term, but a £50 early exit fee would apply