Advice please stay on flexible octopus or change to Sainsbury's

Scienceguy

I've been on flexible octopus since august 2020. Didn't react quickly enough when fixed prices started going up but managed to get on Sainsbury 2year - following details 

Electricity

2 Year Fix and Reward v19 Direct Debit version

Starting on 10/10/2021

Fixed term ends 10/10/2023

22.04p/kWh37.47p/day

(All rates inc. VAT)

Gas

2 Year Fix and Reward v19 Direct Debit version

Starting on 10/10/2021

Fixed term ends 10/10/2023

4.40p/kWh39.82p/day

(All rates inc. VAT)

We use a fair amount of gas - 30,000kwh and about  2,671 kWh/yr electricity (old house). The deal starts on 10th October so I assume I can still pull out. Not sure ifits sensible to leave octopus though as it's much cheaper? Any thoughts...

Ultrasonic

800 kWh per year for electrity would be very low. Are you sure this is right? I'll be honest it sounds a little unlikely.

Scienceguy

Apologies edited 2,671 kWh/yr electricity

Ultrasonic

Scienceguy said:

Apologies edited 2,671 kWh/yr electricity

Yes, that's more believable  . 

Have you done the sums to see the difference between your current tariff and the proposed fix? Essentially you'll be paying more for this winter but will be taking a bet on whether the fix will save you enough energy next winter to make it better overall. Your high gas usage does mean that locking in a lower unit rate for gas will be of more value than for most, and from what I've seen at least, most fixes are charging rather higher unit rates than your Sainsbury's tariff.

t1redmonkey

If I was you I'd go for the Sainsbury's tariff.  It might be a bit more expensive in the short term, but it does give you a bit of peace of mind if the prices stay quite high after price cap inevitably goes up in April next year (at which point the Octopus tariff will probably become more expensive than this Sainsbury's one).  I believe you also get £120 in Nectar points from Sainsburys for switching to them as well and some other incentives so that would probably help offset some of the increased tariff rates.

wittynamegoeshere

The prices are higher than the cap, so you will definitely pay more for the fix until April next year.  Beyond that, who knows - if prices rise even further you gain, if they fall you lose.

You haven't stated what the exit penalty is - if it's low or none then it might be a fair price to pay to remove uncertainty for the next two years.  If prices rise you stay, if they fall you pay the penalty and leave.

I'd suggest totting up the total amount above capped rate in £s you'd be paying from now until the end of April.  Perhaps add on the exit penalty, in case you want to leave later.  If you think this is an acceptable insurance premium then go for it.  Otherwise you can keep the money in your bank and see what happens next year.  Personally I find it hard to believe that the current high prices are permanent, they may not go back to where they were but it's difficult to see how they could permanently remain as high as they currently are.  But nobody knows and, as you've found out, if you want to avoid risk then you need to pay someone else to take this risk off you.