So Energy fixed deal - Any good?

Andrea15

The more I think about it the more I am convinced that fixing is the right thing to do for me. At the end of the day I am betting £80 (i.e., my exit fee) against £1800 (i.e. my yearly charge ). In other words, I am betting about 4.4% of the total. If/when prices go down I can switch and not break the bank. In the first six months I stand to lose my £80 if I switch; if after October 2022 the cap increases by £20 a month, I break even by the end of the year and anything after that I am quids in and if necessary I can switch, even if I have to pay the penalty, without remorse.
In any case, I am protected against further rises and the loss against big drops in price is limited. So, it does seem to make perfect sense to fix.
Does it?

QrizB

Andrea15 said:

In any case, I am protected against further rises and the loss against big drops in price is limited. So, it does seem to make perfect sense to fix.
Does it?

The only risk is that So Energy go bust and you've paid more than you need to for a fix that is now worthless. This is @worrywart_3 's concern at present.

In your particular case the fix won't apply until the end of March and so the risk there is minimal, and you're fixing on the same sort of rates that we expect variable tariffs to be in April anyway.

And if So Energy survive to April the cap increase will taks some of the financial pressure off them (and all the other suppliers, big & small alike).

Andrea15

QrizB said:

Andrea15 said:

In any case, I am protected against further rises and the loss against big drops in price is limited. So, it does seem to make perfect sense to fix.
Does it?

The only risk is that So Energy go bust and you've paid more than you need to for a fix that is now worthless. This is @worrywart_3 's concern at present.

In your particular case the fix won't apply until the end of March and so the risk there is minimal, and you're fixing on the same sort of rates that we expect variable tariffs to be in April anyway.

And if So Energy survive to April the cap increase will taks some of the financial pressure off them (and all the other suppliers, big & small alike).

Fair enough, but, as you point out, in my case the risk is pretty much nil as there is no better deal that I can find. The only downside is that I could have gone with, say, British gas - which is the next cheapest, but it costs £13 more per months, has a £100 penalty if I leave sooner and it is fixed until December (more to the point, probably I would have to switch sooner than I wish) - who are unlikely to go bust and leave me stranded.

I was expecting So Energy to go bust before, but they have managed to survive up until now somehow. All the cheap fixes must be coming to an end, so the worst SHOULD be over for them.

Spies

I'm extremely money savvy, and I say it is most definately not the right thing to fix at this time.

Price cap will not be over the prices you've been quoted and they can't change for a year anyway, you'll likely find that come summer providers are able to offer lower unit rates again so I would just hang on. 

£40 still buys a decent amount of energy! 

QrizB

Andrea15 said:

I was expecting So Energy to go bust before, but they have managed to survive up until now somehow. All the cheap fixes must be coming to an end, so the worst SHOULD be over for them.

So Energy is now largely owned by ESB Energy, and ESB Energy is Ireland's national energy supplier, so theyve got some solid backing.

Andrea15

Spies said:

I'm extremely money savvy, and I say it is most definately not the right thing to fix at this time.

Price cap will not be over the prices you've been quoted and they can't change for a year anyway, you'll likely find that come summer providers are able to offer lower unit rates again so I would just hang on. 

£40 still buys a decent amount of energy! 

They should change in October, should't they?

Did you check my maths here?
https://forums.moneysavingexpert.com/discussion/comment/78911764/#Comment_78911764

bristolleedsfan

Spies said:

£40 still buys a decent amount of energy! 

£80 if you end a dual fuel agreement - 2 year fix

Andrea15

bristolleedsfan said:

Spies said:

£40 still buys a decent amount of energy! 

£80 if you end a dual fuel agreement - 2 year fix

True, but it is a matter of scale. Now £80 would buy me (on average) about one months and a 2 days worth of energy. In this brave new world we are entering, it will buy me just shy of 16 days.
If prices stay the same, I am OK, meaning I don't lose and it doesn't really matter what I do. If they rise even slightly, I am quids in. If they fall, I would have to switch once the cumulative savings is over £80. In the end I am betting just £80 and no more and that protects me against any further rise. Unless a drop in prices is likely in October (and Martin's crystal ball says it isn't that likely at this moment in time) it makes sense to fix IN MY CASE.

I could fix only for 12 months, penalty only £20+£20, but the tariff is £70 more expensive. Would that make sense? Not really...

Andrea15

After much soul searching (and number crunching) I have decided to accept their offer, fixing it for 2 years, until end of March 2024. At least now I can ignore what happens next for a good while.
And even if it turns out I am wrong at least my metal health will gain from it - and I can't be THAT wrong anyway. Should things change drastically, I can fork out my £80 and the hell with it

worrywart_3

How come so energy are offering you such a low fix compared to others?