Variable or Fixed rate?

angie54321

For the past 10 years or so, I have plumped for the time limited, fixed rate energy deals.

I've just joined the Cheap Energy Club, and the best deals for me are People's Energy, Pure Planet and Outfox - all variable.

The cheapest fixed deal is Scottish Power - a difference of £163 a year above the cheapest variable. £1325 variable or £1488 fixed for 13 months.

I'm tempted to go for the variable deal - but considering the pros and cons.

PROS

1. Cheaper
2. More flexible - can switch anytime

CONS

1. May suddenly increase in price, esp with winter coming
2. May have to switch frequently to get best deals (how frequently?)

What should my other considerations be? Should I go for the variable, knowing I can jump at any time - and in your experience, has staying on variable worked out cheaper than staying on fixed contracts?

Mister_G

How good is your crystal ball?

The general consensus is that prices are only going to rise.

Personally I have chosen 1 or 2 year fixes for the past 5 years or more. They have usually worked out cheaper on an annual basis than having the corresponding variable tariff.

Mind you, two of the suppliers that I had have gone to the wall!

JJ_Egan

Variable what is todays tarriff unit cost and standing charges .
Ignore the estimated estimates .

Anthorn

Mister_G wrote: »

How good is your crystal ball?

The general consensus is that prices are only going to rise.

Personally I have chosen 1 or 2 year fixes for the past 5 years or more. They have usually worked out cheaper on an annual basis than having the corresponding variable tariff.

Mind you, two of the suppliers that I had have gone to the wall!

What consensus?

It is the position of M.S.E. that "deals are disappearing fast" and to fix tariff and/or supplier now. But that's not true for me: For the supplier I'm with which is Scottish Power, the price has not changed over the last four months with the online December 2019 fix being £63 more than my current fix (Online Super Saver December 2018) throughout that 4 months period. But now there is a new entry with SP's Super Saver December 2019 which is £51 more than my current fix. So therefore in my case SP's prices are reducing and not increasing.
(MSE CEC comparison).

So therefore MSE's position to fix now comes across to me as a promotion of their own CEC rather than a statement of fact!

angie54321

Mister_G wrote: »

How good is your crystal ball?

The general consensus is that prices are only going to rise.

Personally I have chosen 1 or 2 year fixes for the past 5 years or more. They have usually worked out cheaper on an annual basis than having the corresponding variable tariff.

Mind you, two of the suppliers that I had have gone to the wall!

I can't afford a crystal ball yet, I'm hoping someone else has one

My real question is I suppose, that if energy bills do go up, are they going to go up by £163 a year, which is the difference - over 10%? Because I've been on a fixed tariff for as long as I can remember, I don't pay much attention to announcements about price increases!

System

The fixed versus variable argument has changed since the introduction of the Default Tariff Cap. The difference between fixed and variable tariffs has narrowed, and the Default Tariff is effectively a SVT cap until April 19. My fixed tariff ends in Feb 19, and I will probably go for a SVT for a couple of months before carrying out a full market price comparison review.

angie54321

Hengus wrote: »

The fixed versus variable argument has changed since the introduction of the Default Tariff Cap. The difference between fixed and variable tariffs has narrowed, and the Default Tariff is effectively a SVT cap until April 19. My fixed tariff ends in Feb 19, and I will probably go for a SVT for a couple of months before carrying out a full market price comparison review.

Hmm, I was thinking that this might be the best bet for me as well - to go to a variable and keep an eye on price changes. As I won't be tied in to a fixed deal, I can move suppliers again if necessary.

System

angie54321 wrote: »

Hmm, I was thinking that this might be the best bet for me as well - to go to a variable and keep an eye on price changes. As I won't be tied in to a fixed deal, I can move suppliers again if necessary.

You can get fixed deals with no exit fees. Check Octopus.

angie54321

Hengus wrote: »

You can get fixed deals with no exit fees. Check Octopus.

Thanks, but according to the Cheap Energy Club, it will cost me the same as I'm paying now. I inputted the energy kw I used in the past year so I think that I'm getting fairly accurate results?

System

angie54321 wrote: »

Thanks, but according to the Cheap Energy Club, it will cost me the same as I'm paying now. I inputted the energy kw I used in the past year so I think that I'm getting fairly accurate results?

Have you taken into account the £50 referral cashback that is not available through PCWs? You need a referral code.