To fix or not to fix, that is the question! Octopus Energy

AMUK786

Like thousands of people, I too have been in a conundrum on whether I should move on to the Standard Variable price cap tariff or move on to the more expensive fixed rates.

I see Martin's advice has recently changed slightly from 'Do Nothing' to if you get a decent fix offer (edge cases), it might be time to fix.

I've done some maths based on my actual yearly usage and I think for those on Octopus Energy it might be time to fix onto the Loyalty Tariff (I'm no expert and this is my personal opinion for my situation) since my tariff ends in four days.

I'm just wondering what others are thinking and thought I would share in case this helps others?

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Just in case anyone else is out there on Octopus, here is my example: 

1) High Level Summary: 

• Annual Electricity Usage: 6905
• Annual Gas Usage: 22359

    Octopus offered 3 Tariffs:

• Octopus 12m Fixed
• Flexible Octopus (standard)
• Loyalty 12m Fixed

    My Calculations over the 12m based on my usage above with the following assumptions (a) 40% increase on Flexible Octopus in April 2022 (b) a further 20% increase on            Flexible Octopus in October 2022.

• Octopus 12m Fixed: Total Costs £4999.74
• Flexible Octopus (standard): Total Costs £3462.07   
• Loyalty 12m Fixed:  Total Costs £3987.86 

2) For anyone who wants the details:



Other scenarios for Flexible Octopus: 
(i) 30% increase in April and 20% increase October: £3259.90
(ii) 30% increase in April and 30% increase in October: £3342.03
(ii) 50% increase in April and 20% increase October: £3759.00


Again, I'm no expert and there are many people who may look at my calculations and find something that doesn't add up - hey, we're all humans 

If anyone is interested in a link to the spreadsheet to help with their own calculations, please send a message. 

Good Luck and take care.

Merlin139

AMUK786 said:

Like thousands of people, I too have been in a conundrum on whether I should move on to the Standard Variable price cap tariff or move on to the more expensive fixed rates.

I see Martin's advice has recently changed slightly from 'Do Nothing' to if you get a decent fix offer (edge cases), it might be time to fix.

I've done some maths based on my actual yearly usage and I think for those on Octopus Energy it might be time to fix onto the Loyalty Tariff (I'm no expert and this is my personal opinion for my situation) since my tariff ends in four days.

I'm just wondering what others are thinking and thought I would share in case this helps others?

------------------------------------------------------------------------

Just in case anyone else is out there on Octopus, here is my example: 

1) High Level Summary: 

• Annual Electricity Usage: 6905
• Annual Gas Usage: 715

    Octopus offered 3 Tariffs:

• Octopus 12m Fixed
• Flexible Octopus (standard)
• Loyalty 12m Fixed

    My Calculations over the 12m based on my usage above with the following assumptions (a) 40% increase on Flexible Octopus in April 2022 (b) a further 20% increase on            Flexible Octopus in October 2022.

• Octopus 12m Fixed: Total Costs £2785.55
• Flexible Octopus (standard): Total Costs £2234.47   
• Loyalty 12m Fixed:  Total Costs £2150.28 

2) For anyone who wants the details:



Other scenarios for Flexible Octopus: 
(i) 30% increase in April and 20% increase October: £2103.99
(ii) 30% increase in April and 30% increase in October: £2156.99
(ii) 50% increase in April and 20% increase October: £2364.94


Again, I'm no expert and there are many people who may look at my calculations and find something that doesn't add up - hey, we're all humans 

If anyone is interested in a link to the spreadsheet to help with their own calculations, please send a message. 

Good Luck and take care.

Your Gas usage seems extremely low? Is that figure of 715 Units or kWh? 

AMUK786

Merlin139 - Thank you very much, I completely missed that!  

Looking at the bill, the calculation from units to kwh is × 2.83 × 1.02264 × 38.9 ÷ 3.6 which means the 715 becomes 22359

I'll update the original post it, which makes it much more 'horrific' 

bristolleedsfan

AMUK786 said:

Merlin139 - Thank you very much, I completely missed that!  

Looking at the bill, the calculation from units to kwh is × 2.83 × 1.02264 × 38.9 ÷ 3.6 which means the 715 becomes 22359

I'll update the original post it, which makes it much more 'horrific' 

If that is the case you might like to consider doing nothing at least for gas and then changing maybe just gas to Octopus tracker tariff when flexible tariff increases  much lower standing charge for summer months with kwh rate capped to maximum 6pkwh approx 3.5 months ago - fuels do not have to be on the same tariff - https://octopus.energy/tracker/  - kwh rate changes daily

QrizB

bristolleedsfan said:

If that is the case you might like to consider doing nothing at least for gas and then changing maybe just gas to Octopus tracker tariff when flexible tariff increases  much lower standing charge for summer months with kwh rate capped to maximum 6pkwh approx 3.5 months ago

I might be worrying unnecessarily, but when the Tracker caps were introduced they were roughly 50% above the Ofgem SVT cap. Come April, the SVT cap will be higher for gas and roughly equal for electricity. I wouldn't be surprised if Octopus raised the Tracker caps in parallel to the SVT cap.

bristolleedsfan

QrizB said:

bristolleedsfan said:

If that is the case you might like to consider doing nothing at least for gas and then changing maybe just gas to Octopus tracker tariff when flexible tariff increases  much lower standing charge for summer months with kwh rate capped to maximum 6pkwh approx 3.5 months ago

I might be worrying unnecessarily, but when the Tracker caps were introduced they were roughly 50% above the Ofgem SVT cap. Come April, the SVT cap will be higher for gas and roughly equal for electricity. I wouldn't be surprised if Octopus raised the Tracker caps in parallel to the SVT cap.

Tracker tariff formula and version of has not changed since tariff was introduced about 4 years ago, maximum kwh rate cap was put on tariff purely in response to one electricity only customer screenshotting on twitter very high kwh rate around about 11th September, at that time tracker tariff was showing on quote page as "cheapest tariff"

It is possible maximum kwh rate cap could be increased on tracker and/or increase Agile tariff maximum cap, I would be suprised if that action was taken during summer months if at all particularly as some customers have been on tracker tariff and/or agile paying over the odds for electricity compared with flexible/go tariff all winter,  even if cap was increased kwh rate during summer months might not get anywhere near gas fixed rate kwh levels

Whilst people are concerned about future SVR energy cap increases which are based on wholesale price increases in arrears, in not too distant future Tariffs based on current daily wholesale rate changes will start trend of lower prices

AMUK786

@bristolleedsfan thank you, good idea to split them onto different tariffs, I didn't think about that.

Just one question that I'm unsure about, when reports say 50% increase - is that on both the units and the standing daily charge or will it only be the units?

bristolleedsfan

AMUK786 said:

Just one question that I'm unsure about, when reports say 50% increase - is that on both the units and the standing daily charge or will it only be the units?

Overall increase based on Ofgem averages of supposed typical consumption, worth noting that loyalty 12 month gas kwh rate is approx 108% ish above current energy cap gas kwh rate

QrizB

AMUK786 said:

Just one question that I'm unsure about, when reports say 50% increase - is that on both the units and the standing daily charge or will it only be the units?

Ofgem stes two values for each cap, one (currently around £90pa) for a customer using zero kWh and another for a customer using a 3100kWh of electricity or 12000kWh of gas. Historically there's been less change in the zero cap and a larger change in the usage cap.

(The zero kWh cap is effectively a cap on the standing charge. The other cap is on the total of standing charge and unit costs. Howw suppliers set their tariffs to meet these caps is up to them. Currently, most suppliers have set their SCs to match the zero cap and their unit rates on top, hence all the major suppliers have near-identical SVTs. However there is the odd one (like Outfox the Market) that have set a lower SC which allows them to a slightly higher unit rate. This favours low users but penalises high ones)

AMUK786

QrizB said:

AMUK786 said:

Just one question that I'm unsure about, when reports say 50% increase - is that on both the units and the standing daily charge or will it only be the units?

Ofgem stes two values for each cap, one (currently around £90pa) for a customer using zero kWh and another for a customer using a 3100kWh of electricity or 12000kWh of gas. Historically there's been less change in the zero cap and a larger change in the usage cap.

(The zero kWh cap is effectively a cap on the standing charge. The other cap is on the total of standing charge and unit costs. Howw suppliers set their tariffs to meet these caps is up to them. Currently, most suppliers have set their SCs to match the zero cap and their unit rates on top, hence all the major suppliers have near-identical SVTs. However there is the odd one (like Outfox the Market) that have set a lower SC which allows them to a slightly higher unit rate. This favours low users but penalises high ones)

Thank you, very clear explanation!

AMUK786

bristolleedsfan said:

AMUK786 said:

Just one question that I'm unsure about, when reports say 50% increase - is that on both the units and the standing daily charge or will it only be the units?

Overall increase based on Ofgem averages of supposed typical consumption, worth noting that loyalty 12 month gas kwh rate is approx 108% ish above current energy cap gas kwh rate

Yes, you are right about the gas charge being double the current energy cap.

I see the tariffs now: https://octopus.energy/tariffs/

There seems to something wrong with the Octopus Account Login getting an Uh Oh! message.

From my calculations, now 'Do Nothing' seems to a winner except if the price rises 50% both in April and October?  What are the chances?

I imagine if I did nothing now and then want to fix after the summer to avoid the October increases, the Fixed tariffs will become even more expensive.