Price cap/switched/confused!

scoobiemandan

So we all know about the price cap rise imminent but I’d like some insight and clarification should anyone be able to!

Current unit price I’m paying on flexible tariff is 18.50p kWh electric and 2.97p kWh gas.

Ofgem website states the following;

” From 1 October the equivalent per unit level of the price cap to the nearest pence for a typical customer paying by direct debit will be 21p per kWh for electricity customers and 4p per kWh for gas customers.”

With this in mind, I looked at fixed tariffs with same supplier which have a higher unit price than these caps!

Surely I’d be paying less on the flexible tariff or am I missing the point entirely!

QrizB

Yes you will be paying less on a variable / flexible tariff. The variable tariff has the cap, fixed tariffs don't have the cap.

Flight3287462

Which is fine until the government are forced to raise the cap.  Which will happen when providers decide to throw the towel in and those left trading won't take on the customers from the defunct companies.

Government (unless they have very deep pockets) should not get involved in pricing commodity that is subject to global pressure out with their control.

daveyjp

The new cap was announced in early August, two months before coming into force.  Two months is a long time for a spike to occur, which it has.

The energy companies need to balance the books and hedge, therefore higher fixes are offered to give consumers a lock in which may be high now, but in 6 months may be good value.

However there seems to be much confidence this spike is now over and in 6 months everything will have settled down,  Strange the confidence on predictions are so good for 6 months from now, yet in March there was no mention of a predicted huge spike in September which would have resulted in a higher cap announcement in August!

scoobiemandan

Thanks for the replies!  Didn't think I was going mad.

Yes I know that more cap rises could be possible, which could make a variable/flexible plan more expensive in the future but, as it stands at the moment, not the case!

I wonder how many people have been 'scared' into moving to a fixed price plan meaning they'll actually end up paying more than they would if they remained on the variable/flexi plan?  Seems like a very good sales ploy to me!  Just glad I'm one of those that digs a little deeper before committing to anything!

If the price cap moves again then there will be options to make another judgement call at that time so, can't really lose out if you keep an eye on the figures I guess!  Well, I say you can't lose, we're all losing as we're held over a barrel for energy I suppose!

interbear

My 2 year fix with Octopus for gas ended yesterday. Timing not ideal. I'm now on the Octopus variable rate and having read everything I can on this topic as well as doing "whole of market" searches via MSE Cheap Energy Club, I am convinced that the right answer for me right now is to stick where I am rather than take on a very expensive fix now. Fixing when prices spike up seems counter-intuitive to me. I think I'll wait it out and see where prices are in the New Year or later, and then fix if things have improved. If they haven't improved, or have got worse, well that's another story and everyone who fixed now can be happy 

kazzyb123

interbear said:

My 2 year fix with Octopus for gas ended yesterday. Timing not ideal. I'm now on the Octopus variable rate and having read everything I can on this topic as well as doing "whole of market" searches via MSE Cheap Energy Club, I am convinced that the right answer for me right now is to stick where I am rather than take on a very expensive fix now. Fixing when prices spike up seems counter-intuitive to me. I think I'll wait it out and see where prices are in the New Year or later, and then fix if things have improved. If they haven't improved, or have got worse, well that's another story and everyone who fixed now can be happy 

 Same position here, except my fix ended a while ago, I usually always fix straight away but have a lot going on so hadn’t done it (kicking myself now). I’m sticking with the variable rate. My bills only used to be £850 a year they are now predicted to be £1100 with the price increase but the cheaper fixes have gone.

Dahliaa

Can someone confirm if my understanding is correct

1) can variable tariff move anytime? What is the frequency? I see it is customary to move on Oct 1 and April in line with cap changes. But besides that, can it move weekly/monthly? 

2) Standard variable tariff if it is at cap currently can not go higher until next cap review- which will be in April so it is essentially fixed until April- half year fix.

Crdw

It really does depend a lot on your situation and what you pay now.
My Bulb price increase was still more than the fixed 2 year I got with Sainsbury's (yesterday) so I'm not paying any more than o would have by staying on the vari deal with Bulb (who also has a lot of question marks over it at the moment..).
The nectar points don't harm either.
I don't have an exit fee, so I'm going to ride it through the winter and see what happens next spring.
The feeling is we'll have a massive rise in price in April, so might be October 2022 before we see any better deals about??

QrizB

Dahliaa said:

Can someone confirm if my understanding is correct

1) can variable tariff move anytime? What is the frequency? I see it is customary to move on Oct 1 and April in line with cap changes. But besides that, can it move weekly/monthly? 

2) Standard variable tariff if it is at cap currently can not go higher until next cap review- which will be in April so it is essentially fixed until April- half year fix.

Yes, the standard variable tariff can move at any time, but can't go higher than the cap. If it's already at the cap (and most are) then it can't get any more expensive until the cap is reviewed in April.

It could get cheaper before then (there's no minimum tariff) but that's not likely!