Offered fix that seems good. Any thoughts, please

Be_Happy

I’ve noted Martin’s advice to do nothing about switching to fixed rates but am in doubt about what to do after getting quote from Scottish Power for new 2 year fix.   I have Comfortplus Control meter so am restricted to SP but they have given me very good fixed rates so far.

Details:  (Sorry a long read, but I wanted to list all the information).

My fixed rate of £42.25 per month ends on 30 April.   This matches my usage fairly accurately.   I take readings each month and use spreadsheet and graph to analyse usage and cost.

I have been offered a 2 year fix until 28 February 2024 of £63.27 a month.

The present standard variable rate from SP would cost me £59.12 a month

Assuming an April 40% rise in variable rate this would be £82.77

There would be further capped increases every 6 months during the 2 years.

Moving off my present fix to the new 2 year fix now would cost me £91 extra over the remaining time of present fix, based on my usage for the same time last year.

I feel that I should take the plunge and move to the 2 year fix now as there’s no saying what fixed rates will be offered over the next few months.  There is also the fact that when I submit my monthly readings to SP they will prepare a bill and will tell me if there is a cheaper rate I could move to.   They have done this in the past.  So I could move if a cheaper rate comes up.

Does anyone have any thoughts before I go ahead and phone tomorrow?

One further point I found strange was that, when I phoned, SP could offer the 2 year fix of £63.27 a month, but a 1 year fix would be £80.42.   I’ve always found in the past that rates became more expensive as length of time increased.   Adviser said this was unusual, but figures were correct.???

Thanks

Curiousgirl1

You will get better advice if you post the actual tariff prices rather than what you pay monthly.
tariff you’re paying now, tariff you’ve been offered that you’re thinking about & the other fixed tariff they have 

Reed_Richards

It's very difficult for anyone else to make a judgement as you don't quote the actual rates.  If you have worked it all out yourself based on your usage and the rates then I can't see that asking here but providing less information can possibly help.

victor2

Be_Happy said:

I’ve noted Martin’s advice to do nothing about switching to fixed rates but am in doubt about what to do after getting quote from Scottish Power for new 2 year fix.   I have Comfortplus Control meter so am restricted to SP but they have given me very good fixed rates so far.

Details:  (Sorry a long read, but I wanted to list all the information).

My fixed rate of £42.25 per month ends on 30 April.   This matches my usage fairly accurately.   I take readings each month and use spreadsheet and graph to analyse usage and cost.

I have been offered a 2 year fix until 28 February 2024 of £63.27 a month.

The present standard variable rate from SP would cost me £59.12 a month

Assuming an April 40% rise in variable rate this would be £82.77

There would be further capped increases every 6 months during the 2 years.

Moving off my present fix to the new 2 year fix now would cost me £91 extra over the remaining time of present fix, based on my usage for the same time last year.

I feel that I should take the plunge and move to the 2 year fix now as there’s no saying what fixed rates will be offered over the next few months.  There is also the fact that when I submit my monthly readings to SP they will prepare a bill and will tell me if there is a cheaper rate I could move to.   They have done this in the past.  So I could move if a cheaper rate comes up.

Does anyone have any thoughts before I go ahead and phone tomorrow?

One further point I found strange was that, when I phoned, SP could offer the 2 year fix of £63.27 a month, but a 1 year fix would be £80.42.   I’ve always found in the past that rates became more expensive as length of time increased.   Adviser said this was unusual, but figures were correct.???

Thanks

Always think in annual kWh usage and what the monthly cost of that will be. You say you have that in a spreadsheet anyway, so simple to do.

It is of course pretty much unknown how much prices are going to increase in April and what government help there may be to lessen the pain, but I believe OFGEM take the decision about the cap on variable tariffs in February, so we don't have too long to wait...

Your logic in taking a price hit now, but fixing your prices for 2 years makes quite a bit of sense IMO, but it is of course a gamble.

If the proposed fixed tariff has no exit penalty, then that could give you an easy way out if prices don't go up as expected - you'd just be paying the extra between now and April. Presumably there is no penalty for leaving your current fix early.

I changed supplier last September from a 1 year fix (as it ended) onto a new 2 year fix. It was a bit of a price hike, but has already been overtaken by the last cap increase, so I'm ahead of the game for the rest of the fix, which wasn't available for more than a week after I took it.

Not sure if that helps, but it's my experience.

Be_Happy

For those who asked for more information on tariffs and rate, here they are.

Annual Usage last year:  Control Rate:  2339  Standard Rate: 928

Present Rate:

SCOTTISH POWER GREEN FIXED PRICE  ENDS 30 APRIL 2022

Service Charge:  23.7p  Control Rate:  12.29p   Standard Rate:  17.8p

£42.25 paid now monthly

2 year Fix: 

HELP BEAT CANCER GREEN FIXED 2024

Service Charge:  26.59p  Control Rate:  18.57p   Standard Rate:  28.25

£63.27 quoted monthly

SP existing Standard Variable Rate

Service Charge:  24.95p  Control Rate:  18.41p   Standard Rate:  20.39p

£59.24

If all parts of Standard Variable Rate price cap increased by 40% in April = £83.94 monthly

Have not factored in possible rises every 6 months over 2 year lifespan

QrizB

Thanks for sharing the rates. Do you use the majority of your electricity on the "control rate"? And is there an exit fee from the 2-year fix?

PS for anyone reading this thread that is baffled by SP's various multi-rate tariffs, there's a helpful reference here:
https://www.scottishpower.co.uk/energy-efficiency/energy-efficiency-toolkit/electric-heating

Be_Happy

QrizB said:

Thanks for sharing the rates. Do you use the majority of your electricity on the "control rate"? And is there an exit fee from the 2-year fix?

PS for anyone reading this thread that is baffled by SP's various multi-rate tariffs, there's a helpful reference here:
https://www.scottishpower.co.uk/energy-efficiency/energy-efficiency-toolkit/electric-heating

Yes control rate runs 24 hours a day and covers storage heaters (incl boost), wall heaters, towel rail, electric fire and water heater (overnight and boost).   Storage heaters and water overnight heater are on radio timer controlled by SP and run for around 8/10 hours.  Standard rate also runs 24 hours and covers all other electricity.

There is no exit fee on this 2 year fix.

QrizB

That sounds OK. Personally, I'd be tempted by the 2-year fix if I was in your postion. It will be a litle more expensive for the next 3 months but is likely to be cheaper than the variable rate come April.

Be_Happy

QrizB said:

That sounds OK. Personally, I'd be tempted by the 2-year fix if I was in your postion. It will be a litle more expensive for the next 3 months but is likely to be cheaper than the variable rate come April.

Thanks.  That's my 'gut' feeling too.  Going to phone up tomorrow and hope the offer is still on.

  

lohr500

I may have missed it in the earlier replies, but what is the exit fee if you leave the 2024 fix deal early?
If it isn't too much, then I would also be tempted to switch to the 2024 fixed deal to mitigate any risk from massive increases in April.
Should prices drop in the next few months though either market prices falling or Govt. intervention to prevent a major fuel poverty problem, then you could always jump ship if the exit fee isn't crazy.

Reed_Richards

The Control Rate is only very slightly higher for the 2 year Fix than it is for the SVT.  So if the Control Rate usage accounts for the majority of your total electricity usage then it looks like a good deal if you want to protect yourself against possible future rate rises.  The greater the proportion of electricity you use at the Standard Rate, the less good the deal