How do you calculate the comparison between your current tarrif and the price cap?

emily9

Hi, might be a silly question, but I've read some advice that:

"If you're offered a fix that's no more than 40% more expensive than your current price-capped tariff, it's worth considering – especially if you value price certainty"

But how do you calculate whether this is true for your current/any tariff?

My fixed deal is coming to an end in April and I am looking at new tarrifs ahead of time but I can't get my head around working out how much more expensive the tarrifs are compared to the price cap. Do I compare the units of the energy price cap and the units of the tariff?

Thank you!

Astria

I wouldn't worry about calculating it as I'd be very suprised if there are any fixed tariffs now which are only 40% more expensive compared to the cap.

The SVT might not even go up by 40% if they decide to spread the cost of all the loses over the next few years.

Your fixed period doesn't end until April and the new cap amount will likely be announced at the beginning of February. 

Personally, I'd just sit tight and do nothing. It's a gamble whichever way you jump.

JJ_Egan

As above i dont bother .

Waiting for more information on new SVT etc .

[Deleted User]

Hi,

to calculate,

units used x price/unit,

plus, number of days x daily standing charge,

add together then add 5% vat, if not already included in prices.

eg, 100 x 20p = £20.00

plus, 30x 25p = £7.50

add together = £27.50, (vat £1,37)

QrizB

emily9 said:

But how do you calculate whether this is true for your current/any tariff?

What tariffs have you been offered?

The current cap is around 4.1p/kWh for gas and 21p/kWh for electricity, with a standing charge of 25p/day per fuel. If those prices were to increase by 50%, that would be 6.15p/kWh for gas and 31.5p/kWh for electricity, with a SC of 37.5p/day per fuel.

Exactly how high the cap goes remains to be seen, but we're currently forecasting 8.5p/kWh for gas and 31.4p/kWh for elexcticity. How accurate is that? We'll know in about a fortnight when the cap is announced.

facade

Astria said:

I wouldn't worry about calculating it as I'd be very suprised if there are any fixed tariffs now which are only 40% more expensive compared to the cap.

The SVT might not even go up by 40% if they decide to spread the cost of all the loses over the next few years.

Your fixed period doesn't end until April and the new cap amount will likely be announced at the beginning of February. 

Personally, I'd just sit tight and do nothing. It's a gamble whichever way you jump.

I've heard about this, but won't the energy suppliers simply go bust if a lower cap forces them to continue selling below cost, and they have all last years losses to carry? The only way to keep the cap low is to remove all the energy taxes (which means we will have to pay more tax elsewhere) or subsidise our energy by a couple of pence a unit- again with tax money. I can't see either of these happening tbh.

emily9

The current cap is around 4.1p/kWh for gas and 21p/kWh for electricity, with a standing charge of 25p/day per fuel. If those prices were to increase by 50%, that would be 6.15p/kWh for gas and 31.5p/kWh for electricity, with a SC of 37.5p/day per fuel.

Exactly how high the cap goes remains to be seen, but we're currently forecasting 8.5p/kWh for gas and 31.4p/kWh for elexcticity. How accurate is that? We'll know in about a fortnight when the cap is announced.

Thank you for that. I've been advised to wait till when my fixed ends and once I'm rolled on to my current supplier's SVT I can make some comparisons with other suppliers' SVT and any fixed tariffs that are being offered at the time.

I haven't been offered any tariffs yet but I just wanted to look ahead and get a picture of what to expect by the time my fixed tariff comes to an end.