So Energy Fixed vs Variable

haslamc

My fixed tariff (So Carrot) is coming to an end in March and I've been paying £138 a month, of which that seemed on the high side but it might've been because we were underpaying and so the increase was to pay off debit.

The fixed tariff they suggested we switch to is So Guava, which is an eye watering £219 a month fixed for 2 years.

I did the maths on that new fixed tariff, which does work out at £219 a month based on our usage. However, when I do the same calculations based on the So Flex variable tariff (which says effective from October 2021, but seems to be the current charges), it works out at £125 a month, which is cheaper than my previous fixed price!

As far as I'm aware, my maths is correct, so it seems a no brainer to default to the variable tariff, but I'm just wondering if there would be any reason not to? Prices aren't going to jump from £125 a month to £219 a month in the space of 2 years surely? Also, our account is £44 in credit at the moment, so am I in a position to also ring up and say "my calculations show we'd use £125 a month, based on variable tariff yearly usage divided by 12. I want to pay that please"?

worrywart_3

Not sure how your calculating it but the so carrot is cheaper than the current cap with is the variable which will be increasing in April by 50% roughly then in October it’s predicted to be another 20%. 

haslamc

My calculations for each fuel were based on (annual usage x p/kWh) + (standing charge * 365).

But you're correct that I've totally overlooked the fact that the variable tariff I mention is from October 2021 and the whole point is that it'll be increasing by about 50% in April, which would then make bills £187 a month, and with a further 20% rise in October that would make it roughly what I'd be paying on the new fixed tariff. There would be peace of mind with the fixed 2 year tariff that I'd get an additional 1 and a half years where I'd be protected from further rises after October.

Hard to know what to do really. I thought advice was to default to the variable tariffs at this point. I suppose it's all a gamble.

ChaunceyGardiner

Prices aren't going to jump from £125 a month to £219 a month in the space of 2 years surely?

Why not? Wholesale prices have been going through the roof for months now

QrizB

ChaunceyGardiner said:

Prices aren't going to jump from £125 a month to £219 a month in the space of 2 years surely?

Why not? Wholesale prices have been going through the roof for months now

They've gone through the roof, true, but they haven't really increased since October (admittedly there was a big hump in mid-December).

Here's a chart of day-ahead UK wholesale electricity prices in £ per MWh (so divide by 10 to give pence per kWh) from https://www.catalyst-commercial.co.uk/wholesale-electricity-prices/ :