Octopus Tracker

masonic

Chrysalis said:

masonic said:

The comment in the MSE news article on Tracker that "Octopus has said its rates will likely double during the winter period, when demand for energy is much higher" is confusing.

There is no indication that the price cap is projected to rise to that level, but it surely would if wholesale prices rose significantly.

Having now made equal savings for a month using Agile, I am in two minds about switching to Tracker now it has become an option earlier than anticipated.

Last year prices were higher in summer than winter apart from a small spell in winter, Octopus text is a bit odd in my opinion, it seems they want to encourage people to not use their tracker tariffs, they also still have the message stating that currently rates are really expensive.

Yes, it's a weird thing to state and probably should have been challenged. With Tracker, prices could spike well above SVR rates, but if that happened for a sustained period then barring any government intervention, SVR would soon catch it up and probably surpass it.

Doc_N

masonic said:

Chrysalis said:

masonic said:

The comment in the MSE news article on Tracker that "Octopus has said its rates will likely double during the winter period, when demand for energy is much higher" is confusing.

There is no indication that the price cap is projected to rise to that level, but it surely would if wholesale prices rose significantly.

Having now made equal savings for a month using Agile, I am in two minds about switching to Tracker now it has become an option earlier than anticipated.

Last year prices were higher in summer than winter apart from a small spell in winter, Octopus text is a bit odd in my opinion, it seems they want to encourage people to not use their tracker tariffs, they also still have the message stating that currently rates are really expensive.

Yes, it's a weird thing to state and probably should have been challenged. With Tracker, prices could spike well above SVR rates, but if that happened for a sustained period then barring any government intervention, SVR would soon catch it up and probably surpass it.

It depends what you mean by ‘soon’.  The lag between wholesale and retail rates has proved, and is still proving, substantial. Largely because of forward contracts.

masonic

Doc_N said:

masonic said:

Chrysalis said:

masonic said:

The comment in the MSE news article on Tracker that "Octopus has said its rates will likely double during the winter period, when demand for energy is much higher" is confusing.

There is no indication that the price cap is projected to rise to that level, but it surely would if wholesale prices rose significantly.

Having now made equal savings for a month using Agile, I am in two minds about switching to Tracker now it has become an option earlier than anticipated.

Last year prices were higher in summer than winter apart from a small spell in winter, Octopus text is a bit odd in my opinion, it seems they want to encourage people to not use their tracker tariffs, they also still have the message stating that currently rates are really expensive.

Yes, it's a weird thing to state and probably should have been challenged. With Tracker, prices could spike well above SVR rates, but if that happened for a sustained period then barring any government intervention, SVR would soon catch it up and probably surpass it.

It depends what you mean by ‘soon’.  The lag between wholesale and retail rates has proved, and is still proving, substantial. Largely because of forward contracts.

Soon in the context of being reviewed every 3 months! Tracker should be much more volatile than SVR, but in the long run shouldn't be materially more expensive, and in theory should be cheaper. If the SVR price cap remains at July levels through winter, a doubling of average Tracker rates (i.e. 35p+ elec and 8p+ gas) would be a real head scratcher.

Spoonie_Turtle

Chrysalis said:

Further clarity, I replied to the email asking for extension on "existing terms", the reply word for word was.

Hello,

I hope you are having a wonderful day.

I have extended your Gas tracker tariff for another year on your existing terms.

If you have any further questions please don't hesitate to get in touch, we are always happy to help

Love and Power

AI CS response strikes again.

Chrysalis

Well I have another email now about 4 hours after the manual email, confirming my new tariff, it is the new tracker, so thats put to bed, starts near end of July.

niktheguru

I think the difficulty in the "masses" adopting tracker is that people don't take the time to try and understand how it works. Much like those who ask for advice on stocks and shares and want simple quick answers, then grumble if the advice given turns out to be bad or they lose money.

People have to look at their accounts and take some time to understand how the tariff works and how it would impact them.

I see a lot of people hypothesising about "What if the price spikes at time x", well this is now the risk of this tariff.
Yes the price could go above the variable rate, and it could go up by a sizeable sum upto the cap.
But that has to be offset by how much you are currently and historically saving on this tariff.... take for example, today the tracker rate in my region is 20.13p/kwh compared to the standard variable rate/flexible of 34.18p/kwh, so we are SAVING 14p/kwh today. So if you are saving between 10-20p/kwh most of the time, but then hit a time when the rates are much higher, you can always hand in your notice for leaving the tariff if you are risk averse and it is highly likely you will still have saved overall factoring in the short term potential loss over the two weeks to leave (if it even takes that long in reality) compared to the huge amount you saved beforehand.

Long and short of it, if you are risk averse or you need to know with certainty and budget your outgoings, stay on flexible. If you are willing to take the rough with the smooth, get a nice saving but with a possibility that the prices could go up, but you are able to leave, fee free, then tracker is a sure fire win. 

What is really irritating are those people that don't understand the tariff, don't take a few minutes to try to understand the tariff, want to make savings, but then if things dont go their way will start complaining ad nauseum at the first sign of a daily rate that is above the SVT that "octopus has tricked them, this is a scam etc etc etc". No doubt this will come!

masonic

I think the main concept to comprehend is that hedging comes at a cost, so if you eliminate it, there should be a saving over the long run.

CSI_Yorkshire

masonic said:

I think the main concept to comprehend is that hedging comes at a cost, so if you eliminate it, there should be a saving over the long run.

If the only cost you are considering is the simple financial cost of the purchase.  And even then it's only true for the entire system as a whole, not individual participants.

masonic

CSI_Yorkshire said:

masonic said:

I think the main concept to comprehend is that hedging comes at a cost, so if you eliminate it, there should be a saving over the long run.

If the only cost you are considering is the simple financial cost of the purchase.  And even then it's only true for the entire system as a whole, not individual participants.

What costs other than the financial cost of purchase should consumers consider? We're essentially in a regime where the SVR rate is set to allow for a hedging premium. If the market returns to a competition-driven environment, then all bets are off.

sjnexusmse

Does anyone have an opinion on if it might be better to just switch one service to the Tracker, e.g. just electricity or gas? Is there more predictability / savings potential with a particular one?