Is it even worth switching now? - A discussion

Swoosh84

So I find myself in an all too familiar position with Avro going bust having previously been a customer of GB Energy and Extra Energy who both went to the wall. For the latter two, the choice was easy, I just switched away onto another deal. They were slightly more expensive but still reasonable deals. With Avro and the current market, there are no good deals available at all.

My current rate with Avro 2.365 kWh for gas and 13.9 kWh for electricity, both have a standard charge of 17.00. The cheapest available elsewhere are all variable deals and they all have nearly identical pricing. I assume this is because this is the price cap and they cannot increase beyond this. These rates for me are 4.01 for gas and 20.391 for electricity with a standing charge of 26.123 and 24.867 respectively.

 

What I am struggling with is what exactly the fixed cap rates are? Are they listed anywhere in kWh? So many articles flying around giving the value in pounds which are no good for calculation purposes. I’m pretty sure though that all the rates listed above and the ones available on suppliers the websites at today’s date included the new price cap effective 01/10? Anyone able to confirm this?

 

Looking around the market, every single fixed price deal is at least 15% higher than the current variable tariff rates which are limited by the price cap, some are nearly £800 higher than the price cap. So, I guess my question is, is there even any point in switching. It seems like the cap is the cheapest and that’s at least going to be in place until April next year? In which case, if it goes up by less than 15%, I’m still better off in a variable deal which is limited by the cap?

 

So in conclusion, it appears that anyone switching to a new fixed rate deal currently is going to be worse off than staying on the variable tariff which is currently at cap. What’s everyone’s thoughts on this?

[Deleted User]

There is a clue in the word capped. The price of gas and electricity is costing suppliers more than the Cap allows them to charge. Suppliers have raised their fixed prices to reflect the true cost of energy ( and more). 

QrizB

Swoosh84 said:

What I am struggling with is what exactly the fixed cap rates are? Are they listed anywhere in kWh?

Try this:

https://forums.moneysavingexpert.com/discussion/comment/78622304#Comment_78622304

jimjames

Swoosh84 said:

What I am struggling with is what exactly the fixed cap rates are? Are they listed anywhere in kWh? So many articles flying around giving the value in pounds which are no good for calculation purposes. I’m pretty sure though that all the rates listed above and the ones available on suppliers the websites at today’s date included the new price cap effective 01/10? Anyone able to confirm this?

You can see them in kWh here taken from the Ofgem numbers. They don't include VAT

http://price-calc.321web.co.uk/

LMS123

My fixed deal with Octopus finishes at the end of October. I've spent a quite a bit of precious time on comparison sites and all the new fixed deals are eye watering and mainly for 2 years. The cheapest I found was a 1 year fix with Eon with exit fees so have decided to stay with Octopus on a variable tariff for 3 reasons.
One, I've never had a switch without problems - usually to do with the electricity readings being questioned by the "reading regulator" or whatever it's called. It took 6 months to sort out last time!
Two, if I switch to a new supplier now I suspect the DD through the winter will be high and only reduce next spring/summer once your usage drops and they can calibrate your annual usage but I stand to be corrected.
Three, customer service at Octopus is excellent. However, the standing charges are high and, as a low user, that's not really in my favour.

I may regret this come next April when charges may still be high or even higher but TBH I'm fed up thinking about it

phillw

LMS123 said:

The cheapest I found was a 1 year fix with Eon with exit fees so have decided to stay with Octopus on a variable tariff for 3 reasons.
One, I've never had a switch without problems - usually to do with the electricity readings being questioned by the "reading regulator" or whatever it's called. It took 6 months to sort out last time!
Two, if I switch to a new supplier now I suspect the DD through the winter will be high and only reduce next spring/summer once your usage drops and they can calibrate your annual usage but I stand to be corrected.
Three, customer service at Octopus is excellent. However, the standing charges are high and, as a low user, that's not really in my favour.

I may regret this come next April when charges may still be high or even higher but TBH I'm fed up thinking about it

I would assume that Eon will survive the end of the year while octopus might not and you could be on a deemed tariff and then all of your issues pail into insignificance.

Keep photographic evidence of your meter readings and everything will come out in the wash.

Armengar

There are two things to consider.  One - the cap MUST increase, if not, more will go to the wall which will put a strain on the big players, if one of those go to the wall then it will be a potential re-nationalisation as no company will want to trade with a forced negative income (ironically this would be against UK trading laws anyway...).  Two - what are the wholesale prices going to do?  We arent the only country with this issue, other countries that are net importers will also have the same problems, if you think the prices will go DOWN over the year then look at when you think that will be and see if you will save money by trying to find a fixed deal now (good luck with that) and cost that over the year vs paying at CAP.

Personally?  Right now I would fix if I could (im - well was - with Avro, looks like the horse has bolted for me) and hedge that against a cap rise now and another in april.  Over the calendar year from now I am *guessing* that a fixed deal will be cheaper overall.  I know other people who say "stay on cap and fix when the wholesale drops", however there is nothing stopping you switching again and costing the exit fees into this.  It also depends how much gas and electricity you use.  We use 14k/5k so it is worth looking for me.

It is also worth considering that when the wholesale drops companies will need to make money back so the prices might not drop quickly.  New players will emerge but will you trust a new player with promises and no financial backing?  

Wb90

I missed the boat on the better prices unaware this crisis was unfolding (I don't watch or read the news).

Have just fixed a 3 year with Scottish Power, it's going to cost me £15-20 a month more than staying on the variable but at least I know where I stand. There are also no exit fees so if there is a drastic change in circumstances then it will not cost me to switch should it become sensible to do so. Even at these inflated prices with this fixed rate contract I know we can afford to continue as exactly as we have done for the next 3 years although I will start looking to streamline our usage. We are a heavy user of gas living in a poorly insulated Victorian end terrace, and so will look to be more prudent with gas usage and find alternative methods to keep nice and snug this winter where we have typically had a care-free attitude towards using the heating.

With current projections for prices to only keep rising and the big increase that has already happened during this current period that the April cap is based off, it seems likely that by April next year the variable tariff will be more expensive than the current fixed rate. As it is right now the situation is untenable so there are going to be some huge losses and liabilities that will need to be paid for eventually by someone.

Swoosh84

QrizB said:

Try this:

https://forums.moneysavingexpert.com/discussion/comment/78622304#Comment_78622304

Thank you, this was exactly what I was after and the values you list match up to my own calculations so I know im on the right track.

Now the question is, what to do with this info. There seems to be mixed views, some opting to move onto variable which is capped at a lower cost currently or fix into a higher rate.

Having done my maths, based on what I am currently paying and the new 01/10 variable cap prices, my cost will increase by 52.8% (ouch). The cheapest fixed price I can find is from EON and Sainsbury's which is a two year fixed. There were one year fixed deals availiable yestarday but these seem to have disapeared. But even these deals represent an increase of 77.2% (double ouch) against what im currently paying and 24.3% above the cap. Anyone found anything cheaper than EON or Sainsbury's?

I'm personally leaning towards sticking with the variable tariff as prices have to normalise at some point. Looking at it logically, I could move onto the variable for the next 6 months and pay 24.3% less than the fixed rates on offer. Come the April cap review, if prices are still high the cap would then need to increase by over 48.6% to put me in a position where I would have been better off going on a years fixed price deal at todays date. Can't see the cap increasing that much as it would ruin many a low earners.

Off course, there is always a chance of the cap being scrapped or reviewed again prior to April!

J