Please help, I'm lost!

littlewren

I know everyone's in the same boat and I thought I understood the changes Martin's been talking about but I was wrong and I'm now stuck and so worried.

I'm with Octopus Energy, my fixed tariff ended in January so I was put onto a variable tariff.  I've been following what Martin's been saying but now I just don't understand.

I'd be so grateful if someone could possibly answer my queries (in a basic way as I no longer understand).

1.  If the price cap is going to be cheaper in April than the fixed tariff I've been offered, why would I choose the fixed tariff?  I know it goes up again in October but wouldn't it be best to try to change to a fixed tariff nearer October?

2.  I've been paying £78 per month on their variable tariff, this is changing to £152 on their fixed for 12 months.  I was worried sick last night and took that new fixed one out, now I'm thinking that I've done the wrong thing because I'm on a basic state pension and don't know how I'm going to be able to afford it.  I know I can change back to variable but want to know if that would be the right thing to do.

3.  The fixed deal I've been offered, which is their only one apparently:
     Gas:  9.61
     Electricity:  39.51 (!)
     Economy 7:  21.55

Any help would be very much appreciated as I know you're all trying to work out what to do for the best too, so many thanks x

QrizB

littlewren said:

1.  If the price cap is going to be cheaper in April than the fixed tariff I've been offered, why would I choose the fixed tariff?  I know it goes up again in October but wouldn't it be best to try to change to a fixed tariff nearer October?

No-one knows what the variable rates will be from October; they could be lower, they could be a little bit higher, or they could be a lot higher. Some people would rather pay a higher fixed price over the low-usage summer period so they have the certainty of a known price during the winter.

2.  I've been paying £78 per month on their variable tariff, this is changing to £152 on their fixed for 12 months.  I was worried sick last night and took that new fixed one out, now I'm thinking that I've done the wrong thing because I'm on a basic state pension and don't know how I'm going to be able to afford it.  I know I can change back to variable but want to know if that would be the right thing to do.

The variable rate will cost you less between now and the end of September. No-one can say whether it will be cheaper or more expensive after then.

3.  The fixed deal I've been offered, which is their only one apparently:

     Gas:  9.61
     Electricity:  39.51 (!)
     Economy 7:  21.55

That looks like the E7 version of Loyal Octopus Feb 22 V1. It is Octopus's best fixed-rate tariff.

It's quite unusual to have gas *and* Economy 7. Do you have a mixture of gas and electric heating?

schnegge_london

Hey!

Ok, let me try to help you!

1. The price cap in October is based on wholesale prices from February until I think August (or July). So we're 1 month into this period, so we simply don't know what's happening with the Price Cap in October. And the ongoing escalation in the Ukraine might also play a part, but so far, nobody just knows. And as it is such a volatile environment, waiting longer can pay off or not - as we all don't have a crystal ball, I fear no one can tell. And if wholesale prices stay high, there will be no decent fixes available, as the companies won't sell energy below the wholesale market costs. 

On 2 and 3)
So you took the fixed tariff with the numbers you stated, because you were afraid? 

Remember the price cap from April will be around 29p per KWH for Electricity (you have no gas?), so you will be massively overpaying if you stay on that 39p per KWH tariff for the next 6 months, but as I said above, nobody knows what's happening in October. Then it might be a decent fix if prices raises above that. 

I don't know what other says, but I think the fix is too high to be considered. 

Janie2008

I agree. I think you should cancel the fix. The one EDF offered me was around 8.4p per kw for gas and 30p for electricity and that was very much touch and go whether it would save in the long term. It's higher than Martin is recommending.

littlewren

QrizB said:

littlewren said:

1.  If the price cap is going to be cheaper in April than the fixed tariff I've been offered, why would I choose the fixed tariff?  I know it goes up again in October but wouldn't it be best to try to change to a fixed tariff nearer October?

No-one knows what the variable rates will be from October; they could be lower, they could be a little bit higher, or they could be a lot higher. Some people would rather pay a higher fixed price over the low-usage summer period so they have the certainty of a known price during the winter.

2.  I've been paying £78 per month on their variable tariff, this is changing to £152 on their fixed for 12 months.  I was worried sick last night and took that new fixed one out, now I'm thinking that I've done the wrong thing because I'm on a basic state pension and don't know how I'm going to be able to afford it.  I know I can change back to variable but want to know if that would be the right thing to do.

The variable rate will cost you less between now and the end of September. No-one can say whether it will be cheaper or more expensive after then.

3.  The fixed deal I've been offered, which is their only one apparently:

     Gas:  9.61
     Electricity:  39.51 (!)
     Economy 7:  21.55

That looks like the E7 version of Loyal Octopus Feb 22 V1. It is Octopus's best fixed-rate tariff.

It's quite unusual to have gas *and* Economy 7. Do you have a mixture of gas and electric heating?

Thank you so much for your reply QrizB.  No I only have gas central heating.  My electric meter has day and night readings so I presumed it was still called Economy 7.

littlewren

schnegge_london said:

Hey!

Ok, let me try to help you!

1. The price cap in October is based on wholesale prices from February until I think August (or July). So we're 1 month into this period, so we simply don't know what's happening with the Price Cap in October. And the ongoing escalation in the Ukraine might also play a part, but so far, nobody just knows. And as it is such a volatile environment, waiting longer can pay off or not - as we all don't have a crystal ball, I fear no one can tell. And if wholesale prices stay high, there will be no decent fixes available, as the companies won't sell energy below the wholesale market costs. 

On 2 and 3)
So you took the fixed tariff with the numbers you stated, because you were afraid? 

Remember the price cap from April will be around 29p per KWH for Electricity (you have no gas?), so you will be massively overpaying if you stay on that 39p per KWH tariff for the next 6 months, but as I said above, nobody knows what's happening in October. Then it might be a decent fix if prices raises above that. 

I don't know what other says, but I think the fix is too high to be considered. 

Thanks so much for your reply schnegge. The reason I took it out was because Martin said 'if you can find a fixed rate that is cheaper than 25% more than the April price cap, then you should probably go for it.'  I worked it out (I hope correctly) that it was about 30% more, which was why I fixed.  Yes, I have gas central heating.

littlewren

Janie2008 said:

I agree. I think you should cancel the fix. The one EDF offered me was around 8.4p per kw for gas and 30p for electricity and that was very much touch and go whether it would save in the long term. It's higher than Martin is recommending.

Thanks so much Janie, did you go for that deal?

littlewren

Also, looking at all the posts on Martin's page on Facebook, loads of people have gone for the fixes they've been offered despite them being ridiculously high, i.e. taking their monthly payment sometimes from around £80 to £300-400!  I don't understand why they wouldn't stay on the price cap despite not knowing how it will be in October as it's such a massive leap?

Can anyone explain this plse?

EssexHebridean

littlewren said:

QrizB said:

littlewren said:

1.  If the price cap is going to be cheaper in April than the fixed tariff I've been offered, why would I choose the fixed tariff?  I know it goes up again in October but wouldn't it be best to try to change to a fixed tariff nearer October?

No-one knows what the variable rates will be from October; they could be lower, they could be a little bit higher, or they could be a lot higher. Some people would rather pay a higher fixed price over the low-usage summer period so they have the certainty of a known price during the winter.

2.  I've been paying £78 per month on their variable tariff, this is changing to £152 on their fixed for 12 months.  I was worried sick last night and took that new fixed one out, now I'm thinking that I've done the wrong thing because I'm on a basic state pension and don't know how I'm going to be able to afford it.  I know I can change back to variable but want to know if that would be the right thing to do.

The variable rate will cost you less between now and the end of September. No-one can say whether it will be cheaper or more expensive after then.

3.  The fixed deal I've been offered, which is their only one apparently:

     Gas:  9.61
     Electricity:  39.51 (!)
     Economy 7:  21.55

That looks like the E7 version of Loyal Octopus Feb 22 V1. It is Octopus's best fixed-rate tariff.

It's quite unusual to have gas *and* Economy 7. Do you have a mixture of gas and electric heating?

Thank you so much for your reply QrizB.  No I only have gas central heating.  My electric meter has day and night readings so I presumed it was still called Economy 7.

So how much use do you make of the overnight cheap rate? 

littlewren

As a P.S. when I spoke to Octopus this morning - and I have to say their customer service is excellent - the man tried to explain to me further but it still wasn't sinking in!

He said that staying on the new fixed tariff would be £152 per month, but coming off it and staying on the price cap it would be £120, so not a great deal of difference, which leaves me even more confused as to how he came to that price when I've been paying £78 on the current price cap.  I asked if that was because of the leap in electricity standing charge and he said no.

Also, if I was on a variable tariff (until I changed last night) why is it still referred to as being on the price cap?

Good grief this is so confusing.

Has anyone any ideas plse?

*Thank you for all your help*

Janie2008

Yes I did take the fix but not sure if it was the right thing. The price cap changes every 6 months so there was last October's price cap and the new April one coming up.