Electricity only, fix now to beat the CAP rise? (with a suggestion)

ProDave

Lots of discussion on fixing to beat the looming energy cap rise in April, but most are discussion dual fuel.  This discussion is for the perhaps minority of us on electricity only.

My present (variable, capped) rate is 20.24p per kWh with Octopus.  The "press" seems to be suggesting prices will rise by 50% in April, but they don't make it clear if that is average prices so will gas go up more than 50% and electricity less than 50%  It would be useful if anyone knows how much electricity only is likely to go up.

So for the moment assume a 50% rise I would be paying about 30p per kWh on a capped SVR after April.

Most fixed electricity deals seem to be about 37p per kWh so clearly a switch to that would not work.

BUT (and this is the point of this thread)  Octopus are offering me "Loyal Octopus 12 month fixed" at 27.39p per kWh.  So that has the potential to be a bit cheaper than the possible new capped price, and if there is a further rise to the capped price in October even more saving.

The downside is having to swap to the fix now, if you wait closer to the time of the rise in the cap, that rate might not be available.  I did ask Octopus if they could tell me how long that deal was going to be available.  They could not say, but they did offer to apply that fixed rate to my account but not starting until the end of February.  So NOW it is starting to sound viable.  I would only pay the higher rate for March before the change to the cap makes it potentially cheaper.

And lastly with Octopus, if this gamble proves to be wrong, and the cap rises by a lot less than 50% in April, there is no penalty to abandon the fixed rate and go back to the SVR.

Comments please.

Merlin139

Do you have usage records from previous years to say what you have used each month? Are you able to supply even your yearly usage?

From what I have been reading this morning the new rate will be advised in February. Oct 21 rate was announced on Aug 6th.
This makes me think it maybe much clearer 2nd week of Feb.

ProDave

Yes I know our exact usage for at least the last 2 years so I will punch some numbers into a spreadsheet and look at possible savings by switching to this fix, vs different levels of rise in the cap.

ProDave

What was the percentage rise in Electricity in Oct 21 compared to the percentage rise in gas at the same time?

booshya

ProDave said:

Lots of discussion on fixing to beat the looming energy cap rise in April, but most are discussion dual fuel.  This discussion is for the perhaps minority of us on electricity only.

My present (variable, capped) rate is 20.24p per kWh with Octopus.  The "press" seems to be suggesting prices will rise by 50% in April, but they don't make it clear if that is average prices so will gas go up more than 50% and electricity less than 50%  It would be useful if anyone knows how much electricity only is likely to go up.

So for the moment assume a 50% rise I would be paying about 30p per kWh on a capped SVR after April.

Most fixed electricity deals seem to be about 37p per kWh so clearly a switch to that would not work.

BUT (and this is the point of this thread)  Octopus are offering me "Loyal Octopus 12 month fixed" at 27.39p per kWh.  So that has the potential to be a bit cheaper than the possible new capped price, and if there is a further rise to the capped price in October even more saving.

The downside is having to swap to the fix now, if you wait closer to the time of the rise in the cap, that rate might not be available.  I did ask Octopus if they could tell me how long that deal was going to be available.  They could not say, but they did offer to apply that fixed rate to my account but not starting until the end of February.  So NOW it is starting to sound viable.  I would only pay the higher rate for March before the change to the cap makes it potentially cheaper.

And lastly with Octopus, if this gamble proves to be wrong, and the cap rises by a lot less than 50% in April, there is no penalty to abandon the fixed rate and go back to the SVR.

Comments please.

Martin has said that there are some limited, exclusively available loyalty fixed tarffs that may be attractive to those lucky customers entitled to such tariffs.

You need to do the maths, and assess the risks.

But this may be one of those exclusive tariffs.

If you are still confused, the advice is to remain on the default tariff.

In your situation (and without you having said what your actual usage is, so I will assume you are a typical electricity user) thenit would probably be worthwhile you accepting the fixed tariff.

My reasons are as follows (based on what you have said):
1. It's currently anticipated that from April, the price cap for electricity units will increase by about 50% to about 30p/kWh. The fixed tariff you have been offered will be only 27.39p/kWh
2. You say you can delay the start of this tariff until the end of February (by applying today)
3. There is no early exit fee.

You have not mentioned the standing charge (or any other charge) so I have assumed these to be comparable to that applicable to the default tariff effective April.

So you will only pay 1 month's extra cost, and then get at least 6 months lower cost (and possibly longer depending on what happens in October 2022)

If prices fall, then you can bail out without any exit fees.
The only caution is that if you accept this fixed tariff, you cannot expect to be able to bail out early back onto the suppliers default tariff. But if wholesale prices fall, then there will probably be other cheaper tariffs available at or less than the default tariff at that time.

If you are still confused, the advice of this site is currently to remain on the suppliers default tariff.

ProDave

Standing charge remains the same whichever tariff I choose so I have ignored that.

When I asked could I exit the fixed rate back to the SVR the answer I got was "We don't charge exit fees here so you can change your tariffs as much as you like"

So what rate do you think I would end up on if the cap was lower and I wanted to exit the fixed rate deal?

MWT

ProDave said:

... but they did offer to apply that fixed rate to my account but not starting until the end of February.  So NOW it is starting to sound viable.  I would only pay the higher rate for March before the change to the cap makes it potentially cheaper.

And lastly with Octopus, if this gamble proves to be wrong, and the cap rises by a lot less than 50% in April, there is no penalty to abandon the fixed rate and go back to the SVR.

No reason not to take the 'Loyal' tariff really, by the time it cuts in for you we will already know what the next cap will be so if it is cheaper you can just cancel the change to the new tariff before it happens.

wild666

I know that if I choose to fix with Octopus then my electric rate goes up to 26.72p but the SC stays the same it would be a 6.71p per kWh increase on electric and as my usage is low around 1600 kWh it would be an increase of £107.36 but if I went for their other fix at 35.88p it would be nearly £254.

I am holding off to see what happens before I either fix, stay on the capped rate or move providers.

QrizB

ProDave said:

My present (variable, capped) rate is 20.24p per kWh with Octopus.  The "press" seems to be suggesting prices will rise by 50% in April, but they don't make it clear if that is average prices so will gas go up more than 50% and electricity less than 50%  It would be useful if anyone knows how much electricity only is likely to go up.

I'm expecting the new cap to be around 31p/kWh for electricty.

Tariffs could be a little less than that if wholesale prices fall.

ProDave said:

Comments please.

I'll echo others and say that, if I was in your position, I'd take the Loyal Octopus fix effective from the end of February.

We'll know the new cap some time in early February. If it's less than the Loyal rate (unlikely, I realise) you can cancel Loyal and stick with Flexible.

If the new cap is higher you'll be paying more than the current cap for the whole of March but less from then and for the next 12 months.

If Octopus come out with a cheaper fix - or the Flexible rate falls below Loyal - you can switch then.

booshya

MWT said:

ProDave said:

... but they did offer to apply that fixed rate to my account but not starting until the end of February.  So NOW it is starting to sound viable.  I would only pay the higher rate for March before the change to the cap makes it potentially cheaper.

And lastly with Octopus, if this gamble proves to be wrong, and the cap rises by a lot less than 50% in April, there is no penalty to abandon the fixed rate and go back to the SVR.

No reason not to take the 'Loyal' tariff really, by the time it cuts in for you we will already know what the next cap will be so if it is cheaper you can just cancel the change to the new tariff before it happens.

Cooling off periods, where applicable, are usually 14 days not until the supply starts.

The poster could only cancel after 14 days but before the supply starts, if they then choose either an alternative tariff or switch to a new supplier (assuming the switch occurs before the start date)

booshya

QrizB said:

ProDave said:

My present (variable, capped) rate is 20.24p per kWh with Octopus.  The "press" seems to be suggesting prices will rise by 50% in April, but they don't make it clear if that is average prices so will gas go up more than 50% and electricity less than 50%  It would be useful if anyone knows how much electricity only is likely to go up.

...

We'll know the new cap some time in early February. If it's less than the Loyal rate (unlikely, I realise) you can cancel Loyal and stick with Flexible...

I don't think that will be possible.