Should I take this octopus fix?

gboy25

I was really trying to avoid asking this and trying to work it out myself, but I'm struggling. 
My fix ended in nov and I've been on the variable since. 
My annual usage for last year was - Electricity 1071kWh
Gas 4312kWh
(I predict I will use a bit more this year for a few reasons) 

The fix I have currently been offered is attached. 

I understand on the face of it the unit rates are higher than the april cap. Yet the standing charges are lower. I've been trying to do the sums - 45% more etc... but I dont understand it myself. 
Can somebody better at maths than myself please help me understand? And possibly advise what my best bet is. Many thanks. 

facade

The standing charge is what you pay every day, whether you use any energy or not, so as a year has 365 days, the standing charge for a year is

(365 x 26.45) =  £96.54           PLUS  (365 x 26.10) =  £95.265              Standing charge total £191.81

Gas, multiply the unit price by the number of units, so 

(8.70 X 4312) = £375.14

Electric, multiply the unit price by the number of units

(31.72 x 1071) = £339.72

Then to find the total bill, add the standing charge, gas & electric

(£191.81 + £375.14 + £339.72) = £906.67

Normally, you pay 1/12 th of this per month, so monthly payment = (£906.67 / 12) = £75.56

The proposed cap is 1.5 p less per unit of gas, so it will be cheaper even taking into account the higher standing charge for electric.

However, it may shoot up again in October, or it may come down in between.

Also, you use less gas in the period April-September (about 1/3rd of what you use October-March)

If you have monthly meter readings, you can work out the April - September figures (remember to halve the standing charge though)

I fixed mine on the Octopus loyalty fix that was offered 2 weeks ago, the gas & electric were slightly cheaper. Over April - September I save about £1, but lose a lot Oct- March, so I'm hoping that either the October cap is higher, or there are better fixes about in the Summer.

gboy25

Thank you so much for this explanation! Seems obvious now but I just couldnt get my head round it! 

facade

No problem.

If you want to work it out for higher figures, say 45% more gas, then just multiply the gas amount by 1.45  (unless you have a % key on your calculator, then just do (8.70 X 4312) = £375.14 + 45% = £543.96  )

so [(8.70 X 4312) = £375.14] x 1.45 = £543.96  

Then add the standing charges which will be the same as before (total £191.81)

and the electric, either the same or increase by a percentage.

Total the 3 things (standing charge, gas & electric), then divide by 12 for the approx monthly payment.

It is upto you whether to fix, Octopus are out to make a profit, and now know what their April prices will be even if they haven't told us, so the current fix will ensure that in their opinion, you will slightly overpay if nothing unforeseen happens- they hardly want you to underpay and leave them out of pocket .

But a fix does mean you can budget, and not worry if prices go up a bit in October. (If they go up a lot you can worry, as Octopus might go under and you lose the fix)