Am I missing something? Variable is much cheaper than fixed offers currently available?

Emuchops

Currently with GNE - Gas 0.02 per unit/0.20 per day, Elec 0.15 per unit/0.18 per day. I know it's very cheap and the deal is coming to an end next month. Their variable rate is Gas 0.03 per unit/0.26 per day and Electricity 0.17 per unit/0.23 per day. They have recommended a plan but can't give me the costs via email as they 'change all the time.....' (but they've given me the variable charges...) The Cheap Energy Club has recommended the EON V58 plan for me - Gas 3.47 per unit /7.56 per day, Elec 18.17 per unit/7.56 per day - I'm guessing that GNE's suggested fixed rate plan will be a similar cost. So am I looking at this wrong? The standard variable plan is way cheaper than the best offer from the Cheap Energy Club. I know it will fluctuate but even taking that into account it seems much better value and I'm guessing that I can take up a fixed rate offer at any time if it turns out not to be? I use 1087 kwh per year of Elec and 6040 Kwhs of Gas (according to GNE). I'm a low user I think - single person, 3 bed house, so the standing charge/daily rate is quite important. I would be interested to hear what others think - thank you.

MWT

Emuchops said:

So am I looking at this wrong? The standard variable plan is way cheaper than the best offer from the Cheap Energy Club. I know it will fluctuate but even taking that into account it seems much better value and I'm guessing that I can take up a fixed rate offer at any time if it turns out not to be?

Fixed plans always price in the expectations of the future wholesale price changes, variable rates reflect current wholesale rates.

The risk is that when the variable rate starts to climb the fixed rates may also have increased so will cost more when you decide you need to switch to a fixed rate than they would now...

btr30

The unknown is how long the variable rate will remain at the current rate. When it increases you will be free to shop around, but it may be that prices at that time are more expensive than available at the moment. 

Personally, I would take the cheaper variable rate for now and see what is available when it changes, but hindsight may reveal this not to have been the best strategy 

UnclaimedEnergy

MWT said:

Emuchops said:

So am I looking at this wrong? The standard variable plan is way cheaper than the best offer from the Cheap Energy Club. I know it will fluctuate but even taking that into account it seems much better value and I'm guessing that I can take up a fixed rate offer at any time if it turns out not to be?

Fixed plans always price in the expectations of the future wholesale price changes, variable rates reflect current wholesale rates.

The risk is that when the variable rate starts to climb the fixed rates may also have increased so will cost more when you decide you need to switch to a fixed rate than they would now...

It depends on the supplier.

Fixed plans normally are priced based on the current wholesale prices for the duration of the fixed contract. Suppliers would normally try to forecast how many customers a fixed tariff would sign up and would purchase the amount of power needed for those customers. 

What's important to realise though is that, once you have a customer on a fixed tariff, the unit rates and margins are fixed and can't be changed. Most of the cheap fixed tariffs are at a negative margin and therefore suppliers are then hoping they can roll customers over onto the price cap.

Cheap variables on the other hand can be increased at any point, given a reasonable notice (normally 30 days). We've seen it recently with Outfox the Market increasing their variable tariff by maybe 20% due to rising wholesale costs etc. It allows suppliers to not wait as long to get a price increase in for the customers they've signed up and therefore is less risky for them than a loss-making fixed tariff.

JJ_Egan

Probable price increase in April as well .

Gerry1

You seem to be making several classic mistakes, possibly more.

• Not considering separate suppliers, only dual fuel.
• Quoting prices only to 1 significant figure (is the gas really 3.000p/kWh?), muddling pence and pounds (and missing VAT?)
  
• Relying only on the CEC (which doesn't show all tariffs).  Also try Citizens Advice and 'Which? Switch'.
• Relying on an estimate or projection ('according to GNE') rather than your own meter readings.  Your usage seems to be  about half the average, so you need to check.

gill5blue

Hi, ive just had the same , my fixed is coming to an end in february and new fixed or variable with same supplier are cheaper than the cheap energy club. i am going to choose variable for a month or two to see if current siupplier will offer a more luckrative deal.
Gill5blue