Fixed rate tariff or not

IGraham

I received a letter from my energy provider SSE asking if i wanted to move to a fixed rate tariff.

At the moment my average monthly cost is £117.08, the fixed tariff for two years is £216.11 and £204.28 for three years.

Given that energy prices are going to rise, should i move or not - I'm a bit of a rabbit in the head lights regards all this.

jimjames

It's not the amount that matters it's the rates. But why change from £117 to pay £216? Even a 50% increase in April is less than that.

TheMilkmansDad

what are the rates being offered? General advise at the moment is to do nothing when your current fix ends and you'll move to the deemed tariff. What are those rates for SSE? Bear in mind that will go up +40% on 1st April.

If you know your annual consumption you should be able to do some simple maths to work out which may be best for you. 

IGraham

I'm on a standard variable tariff at the moment and I'm assuming this will rise, having no idea who much it might rise i thought I'd ask here. The two people who have replied (thanks) have mentioned +40% and 50% both of which are less than the over 100% of the fixed rate offer. As long as the rise is less than 100% then I'm better of on the standard variable tariff I'm on now.
Thats when the rabbit in the headlights comes in, is it possible the variable rate might go up by more than 100% is it possible the present fixed rate might go up (before April) and I'll have missed out on it. This last bit is my dilemma, does anyone have an opinion on this ?
I'm inclined to stick with the variable rate

TheMilkmansDad

all indications seem to range for an increase of between 40-50% for the new cap on 1st April, we'll know more in a few weeks.

QrizB

IGraham said:

I'm on a standard variable tariff at the moment and I'm assuming this will rise, having no idea who much it might rise i thought I'd ask here.

You can see my most recent estimate for the Ofgem cap here. That's a 110% increase in gas prices (from 4.1 to 8.5p/kWh) and 50% increase in electricity prices (from 21 to 31.4p/kWh).

What no-one knows is whether the April variable rates will increase all the way to the cap or whether they will be set somewhere below it. Historically, variable rates have been below the cap; it's only for the past few months that rates have matched the cap. However looking at current gas prices I suspect rates will be close to the cap.

is it possible the variable rate might go up by more than 100%

It's mathematically possible but vanshingly unlikely.

is it possible the present fixed rate might go up (before April) and I'll have missed out on it.

It's very likely that your suppliers fixed rate offers will change once or twice (or more) before April. No-one can say which direction they are likely to change in; they could get cheaper or more expensive.

Gerry1

Might be a good idea to pencil in a few favourable fixed tariffs on 6 February, see what the price cap is on 7 February and if it still looks good then switch immediately before it's withdrawn.

You'd have 14 days to cancel if a better tariff were then announced.

spot1034

IGraham said:

I'm on a standard variable tariff at the moment and I'm assuming this will rise, having no idea who much it might rise i thought I'd ask here. The two people who have replied (thanks) have mentioned +40% and 50% both of which are less than the over 100% of the fixed rate offer. As long as the rise is less than 100% then I'm better of on the standard variable tariff I'm on now.
Thats when the rabbit in the headlights comes in, is it possible the variable rate might go up by more than 100% is it possible the present fixed rate might go up (before April) and I'll have missed out on it. This last bit is my dilemma, does anyone have an opinion on this ?
I'm inclined to stick with the variable rate

Given that wholesale prices have dropped in recent weeks (although I see they're up a few per cent today) it is more likely that fixed rates might come down. However, if Russia invades Ukraine...... need I go on?  

otb666

I decided to fix mine til feb24 was paying 120 now paying 205 pm,  i needed security as newly retired  You can always change back to standard prices, its best to get your total annual usage and work it out, using the comparison sites . For me I was fed up with it being on the news all the time like brexit and covid and my nerves were shattered.  I will keep an eye on prices quarterly and close that door for now if you know what i mean

PennineAcute

jimjames said:

It's not the amount that matters it's the rates. But why change from £117 to pay £216? Even a 50% increase in April is less than that.

But that 50% increase is from October '21's capped rate and the estimated April 22's capped rate.

If the OP opts for SSE April's capped rate - they would have the increase to Oct 21's rate and then the estimated 50% increasae.

It would only need a 33.33% increase from the OP's old tariff to hit the Oct 21 SVT, for the estimated 50% increase in April to double their old monthly payments.

JamesWhite19

I'm with So Energy, my current fixed deal is ending in March  and the new rates offered for a fix are below.....the standard variable is cheaper for me at the moment (it feels strange saying that)

Unit rate - electricity - Increase by 88.3%

Standing charge - electricity - Increased by 21.6%

Unit rate - gas -  172.3% Increase

Standing charge gas - 18.4% Increase