to switch or not to switch

QrizB

Ultrasonic said:

QrizB said:

richpluk said:

Hi folks. 

My tariff expires in February, however I am anxious that the prices are going to get even higher next year so was thinking of switching early even though it means paying exit fees £60. If I do it through TopCashback I can get £120 for switching to Scottish Power Fixed Price August 2024 YM2 Online. 

There had been massive price hikes in the past, in your personal experience is it worth switching now, paying exit fees, getting cash back and freezing prices until August 2024? Had any of you done it in the past and didn’t regret? 

Fixed Price August 2024 YM2 Online

Electricity
Unit rate 24.578p per kWh
Standing charge 25.672p per day

Gas
Unit rate 5.822p per kWh
Standing charge 26.596p per day

You're going to earn £120 cashback, but spend £60 of that on exit fees? You're only really gaining £60.

On the other hand, that tariff is quite expensive by current standards. I don't know what your current deal is or how much you use but the standard variable rate cap (SVT) is around 20p/kWh for electricity and 4p/kWh for gas.

If you're an average household using 2900kWh of electricity and 12000kWh of gas, switching to that SP tariff will cost you an extra £570 over the next year, compared to the current SVT. A lot more than £60 you'll gain from the switch.

I was a bit surprised how big that difference was and so just did some sums. For the quoted tariff figures and 2900/12000 usage I make the anual cost £1602.18, so unless the SVT you're referring to is signficantly cheaper than the price cap (unlikely I'd have thought?) I don't think the extra cost can be as much as £570? 

Apologies, I think my fingers must've slippped. Here's my workings, corrected:

• 12000kWh at (5.822 - 4)p/kWh = £218.64
• 2900kWh at (24.578 - 20)p/kWh = £132.76
• Excess = £351.40

I've ignored the SC difference as the SP rates are pretty close to the Ofgem cap for both fuels, and depending on exactly where in the country you are your SVT elec & gas unit prices could be a little higher than 20p and 4p respectively, whoich would make the difference a bit less.

Not £570 after all but still a lot more than the £60 you'll gain.

Bubba_Shaboo

QrizB said:

Ultrasonic said:

QrizB said:

richpluk said:

Hi folks. 

My tariff expires in February, however I am anxious that the prices are going to get even higher next year so was thinking of switching early even though it means paying exit fees £60. If I do it through TopCashback I can get £120 for switching to Scottish Power Fixed Price August 2024 YM2 Online. 

There had been massive price hikes in the past, in your personal experience is it worth switching now, paying exit fees, getting cash back and freezing prices until August 2024? Had any of you done it in the past and didn’t regret? 

Fixed Price August 2024 YM2 Online

Electricity
Unit rate 24.578p per kWh
Standing charge 25.672p per day

Gas
Unit rate 5.822p per kWh
Standing charge 26.596p per day

You're going to earn £120 cashback, but spend £60 of that on exit fees? You're only really gaining £60.

On the other hand, that tariff is quite expensive by current standards. I don't know what your current deal is or how much you use but the standard variable rate cap (SVT) is around 20p/kWh for electricity and 4p/kWh for gas.

If you're an average household using 2900kWh of electricity and 12000kWh of gas, switching to that SP tariff will cost you an extra £570 over the next year, compared to the current SVT. A lot more than £60 you'll gain from the switch.

I was a bit surprised how big that difference was and so just did some sums. For the quoted tariff figures and 2900/12000 usage I make the anual cost £1602.18, so unless the SVT you're referring to is signficantly cheaper than the price cap (unlikely I'd have thought?) I don't think the extra cost can be as much as £570? 

Apologies, I think my fingers must've slippped. Here's my workings, corrected:

• 12000kWh at (5.822 - 4)p/kWh = £218.64
• 2900kWh at (24.578 - 20)p/kWh = £132.76
• Excess = £351.40

I've ignored the SC difference as the SP rates are pretty close to the Ofgem cap for both fuels, and depending on exactly where in the country you are your SVT elec & gas unit prices could be a little higher than 20p and 4p respectively, whoich would make the difference a bit less.

Not £570 after all but still a lot more than the £60 you'll gain.

And would that 12 month excess figure diminish if the SVT were to increase in April in line with the Ofgem price cap, as many fear/predict?

QrizB

Bubba_Shaboo said:

QrizB said:

Apologies, I think my fingers must've slippped. Here's my workings, corrected:

• 12000kWh at (5.822 - 4)p/kWh = £218.64
• 2900kWh at (24.578 - 20)p/kWh = £132.76
• Excess = £351.40

I've ignored the SC difference as the SP rates are pretty close to the Ofgem cap for both fuels, and depending on exactly where in the country you are your SVT elec & gas unit prices could be a little higher than 20p and 4p respectively, whoich would make the difference a bit less.

Not £570 after all but still a lot more than the £60 you'll gain.

And would that 12 month excess figure diminish if the SVT were to increase in April in line with the Ofgem price cap, as many fear/predict?

Yes but.

I can't speak for anyone else but we use ~75% of our electricity and gas during the 6 months Oct-Mar. During this time your saving on the SVT will be around £260. If the capped unit rates for both electricity and gas increase by 20% from April (and no-one is currently forecasting that big a rise) to 4.8p/kWh for gas and 24p/kWh for electricity they will still be cheaper than the fixed-rate tariff.

With the fix you're taking a bet on (or hedging against, if you prefer) a further rise in October 2022. If prices rise by *another* 20% then, the capped gas rate will be around 5.8p/kWh, roughly equal to the fix, and the electricity cap of around 29p/kWh will be high enough that you're finally going to start making a saving of 3.5p/kWh; on 2900kWh that's £101.50, so you're still down overall on the SVT.

And after that we're into speculating over energy prices in April 2023. If I had any clue of those, I'd be a City trader not posting on the MSE forums.

richpluk

QrizB said:

You're going to earn £120 cashback, but spend £60 of that on exit fees? You're only really gaining £60.

On the other hand, that tariff is quite expensive by current standards. I don't know what your current deal is or how much you use but the standard variable rate cap (SVT) is around 20p/kWh for electricity and 4p/kWh for gas.

If you're an average household using 2900kWh of electricity and 12000kWh of gas, switching to that SP tariff will cost you an extra £570 over the next year, compared to the current SVT. A lot more than £60 you'll gain from the switch.

 My annual usage is 2500 electricity and 6000 for gas
 my current electricity rate 16.859p, standing charge 10.54p
 gas rate 2.813p, standing charge 7.33p per day

 I looked at various offers and think I am gonna stay put for now. I just can’t believe how expensive energy has become.