Variable vs Fixed rate Dual fuel?

waiting4thepenny2drop

Hi, so I’ve had afew message from my current energy supplier asking me to join a 2 year fixed rate contract with them. 

I understand that prices have gone up etc. And this is the offer they’ve given me (Roughly)

(Electric 4000kwh / Gas 12000kwh)

£125 per month / £1500 a year

this is using actual energy usage and every year previous is very similar. 

I did a standard variable quote and it was around £107 per month / £1300 a year.

ive read about the energy cap set by ofgem but I’m not 100% sure on what it means. 

From what I think I can gather, energy companies are not allowed to charge me more than the 1300 a year based on my average useage. (I understand if you use more you pay more) 

I’ve been in fixed deals for years, but I’m wondering if anyone can help me understand that at the moment it might be better for me to go variable? Or am I missing something?

So basically can I save myself £200 a year by going onto a variable rate

thanks for any help, please go easy on me it’s my first post!!!

Gerry1

Welcome to the forum.

Your usage is not average, so you're not capped at that Ofgem figure, which only applies to the standard default tariff.  Some companies are offering fixed deals at 20% above the cap, which they are not banned from doing.

The cap is of doubtful benefit.  It helps millionaires for whom energy bills are merely loose change, and it helps offline little old ladies who still think they are using the Gas Board and the Electricity Board.  But it potentially disadvantages those savvy enough to shop around and get the best deals (which are effectively subsidised by the expensive ones).

Basically it all comes down to your acceptance of risk and the accuracy of your crystal ball.  There aren't necessarily any right or wrong answers, only time will tell.

Have a look at some comparison sites starting with Citizens Advice and 'Which? Switch' and check whether separate suppliers are cheaper than dual fuel.  Make sure that you search the whole market, there's a button to click which is often well hidden except for the two sites that I've mentioned.

stewie_griffin

The price cap isn't based on your usage but average usage across the country. Your usage on both fuels is a bit more than average so you'd pay more than £1300 (or whatever the exact ofgem figure is).

apt

Variable rates are going up sharply in early October. Why dual fuel? Been cheaper to do separate gas and electricity deals for several years.