To Switch or Not to Switch?

Christo54

I was with PFP energy and have ben transferred to B Gas.  In their initial contact the said my estimated usage was about 3 times my actual (based on my last house, we moved in April this this year) at some £300 per month.  EDF are offering a fixed rate to October 2023 but I'm unsure as the monthly cost is around £165 per month (Dual Fuel).
Does anyone have a view on the value of fixing at this time?  I know the price cap will rise next April (and probably every April & October thereafter) but if Russia was to step up production again this would reduce gas prices and the Fixed Rate on offer comes with a £100 per fuel switch fee.
Any suggestions/advice gratefully received.

spot1034

You will almost certainly be better off rejecting any offer of a fix and going with the SVT through the winter. Yes, the cap will probably rise in April (though it is wrong to assume it will keep going up forever) but by then there may well be some better fixes on offer, and even if there aren't, your highest period of usage is the six months starting now so take advantage of it and worry about the future when it comes. It is very unlikely that prices will stay at these levels forever. 

The 'switch fee' - do you mean exit fee? If so, £100 per fuel is ridiculous. 

Bexie1989

Honestly I really don't think there's much point switching to a fix now. Most fixes are for a year, on the variable you're at least at the cap which is good for another 6 months. Yes, the cap will end up going up, but the prices I've seen for some fixes now (I've seen as high as 40p per kwh!) On the variable, you know you're fine for the next 6 months at around 20-21p (as I don't have gas I haven't kept up with the prices for gas), and even if the cap goes up, things will likely stabilise and there will be more switching options. And the cap HAS gone down in the past!

The £100 exit fee alone is enough to make me say "no way". It's obscene! (and btw, when I got a quote from EDF just a couple of weeks ago, the exit fee was only £15 per fuel...) There's only one reason I can see to put an exit fee so high - they're anticipating prices will start falling again long before that fix ends, and the £100 per fuel is to try and stop customers switching away in droves when that happens.

Honestly, I predict that sometime around Spring next year things will have stabilised and the companies that survive the winter will end up in a price war to offer the best fixed price to entice back customers that switched to higher tariffs. I don't think the prices will be as low as they were, but certainly better than they are now!

Also: you say that you're paying more at British Gas because their estimate for you is too high. That's very different from paying a much higher price per unit. Once you've been with them for a bit, and they get some actual meter readings from you (or you could try contacting them with your readings yourself to get them to change it), this will sort itself out.

worrywart_3

 Bexie1989 said:

Honestly I really don't think there's much point switching to a fix now. Most fixes are for a year, on the variable you're at least at the cap which is good for another 6 months. Yes, the cap will end up going up, but the prices I've seen for some fixes now (I've seen as high as 40p per kwh!) On the variable, you know you're fine for the next 6 months at around 20-21p (as I don't have gas I haven't kept up with the prices for gas), and even if the cap goes up, things will likely stabilise and there will be more switching options. And the cap HAS gone down in the past!

The £100 exit fee alone is enough to make me say "no way". It's obscene! (and btw, when I got a quote from EDF just a couple of weeks ago, the exit fee was only £15 per fuel...) There's only one reason I can see to put an exit fee so high - they're anticipating prices will start falling again long before that fix ends, and the £100 per fuel is to try and stop customers switching away in droves when that happens.

Honestly, I predict that sometime around Spring next year things will have stabilised and the companies that survive the winter will end up in a price war to offer the best fixed price to entice back customers that switched to higher tariffs. I don't think the prices will be as low as they were, but certainly better than they are now!

Also: you say that you're paying more at British Gas because their estimate for you is too high. That's very different from paying a much higher price per unit. Once you've been with them for a bit, and they get some actual meter readings from you (or you could try contacting them with your readings yourself to get them to change it), this will sort itself out.

I read it that the £100 was the cashback for switching not the exit fee 

Christo54

Thank you all for your replies and insight.  I think I'll take your advice and stick with B Gas for now.
I realise the estimate by B Gas isn't what I'll pay I was just surprised that they think that a small domestic residence uses that much power.
And yes it is a £100 exit fee per fuel - I couldn't believe it either worrywart_3 !!!!!