Stunned at British Gas new fixed tariff or am I being naive?

Bazooka_joe

 So I’m on a fixed British Gas tariff until Feb 2022. I’m paying £132 per month for both gas and electric. If I jump to a new fixed tariff that locks in until December 2023, the price jumps to £218 per month. That’s an increase of over £1000 per year. Surely it’s better for me to hang on and see where things are early next year. 

Streaky_Bacon

Almost certainly better to stick with your current fixed tariff and then roll onto the standard variable rate tariff, which is price capped until April 2022 (the new BG fixes are roughly 50% higher than the current cap, 6p vs 4p).

By April you will probably have used the vast majority of the gas that you will use until Winter 2022.

Of course, it's always possible that the new fix could look ridiculously cheap in 12 months time, but it's unlikely and the standard wisdom now is to stay put and roll onto the SVR.

wittynamegoeshere

Sadly many are just accepting the advice of the suppliers and taking their current "best" offer.  Our elderly relatives are one example I know of.  They won't understand the consequences until the direct debit starts ramping up.

If what's currently going on is not "mis-selling" to vulnerable people then I don't know what is.

Nobody's got a crystal ball, but it's extremely unlikely anyone will save money by switching to a fixed tariff at the moment.

MWT

wittynamegoeshere said:

Nobody's got a crystal ball, but it's extremely unlikely anyone will save money by switching to a fixed tariff at the moment.

I do agree that it is highly likely that a good number of people (regardless of age) will end up taking another fixed tariff without full understanding of what they are doing, but I'm not so sure that the next cap increase isn't going to make some of those choices look a lot better in 6 months time than they look right now...

There were some pretty decent 2 year fixes around a week or so ago, but it looks like those have gone now and the trend seems to be for the fixes to continue rising.

It is rapidly changing market where last weeks high fix is looking a lot better than this weeks fix.

wittynamegoeshere

The rise in April would need to be absolutely insanely high for these 150%+ 12-month fixes to make any sense to anyone.  Bear in mind that the vast majority of the next 12 months' fuel use will be over the next six months up to April, the energy use in the six months after April will be much less.

My guess would be that of the next year's use, I will probably use about 75% of it before April.  Prices would need to treble in April before the remaining 25% of use would give a total of the 150% that they're charging.

I can't imagine that electricity will rise to 60p/unit in April, so I'm happy with a variable tariff.

MWT

The 12 month fixes make no sense at all, some of the 24 month fixes a few days ago were arguably of some use, but they have gone and the current prices far too high to be useful.