Energy Query - My worked example

Nardge

Good afternoon,


I'd be grateful if you could help confirm/refute the reasoning below, as I consider returning to a fixed/capped rate from the current standard variable one.

I'm currently with 'Shell' for my Energy, all runs off electric, I have no gas.

Shell recently announced I'd be paying £776/year from 01/04/22 (previously £536/year).

Yesterday (11/03/22) 'Ovo' released a fixed/capped deal in the MSE Energy Club.

This Ovo deal would see payment of £1083/year from 01/04/22 (previously £536/year).

Martin suggested considering fixing/capping up to 25% above the 01/04/22 rise, with 40% being the upper limit...

Since price increases haven't plateaued, my logic/mathematics suggests that fixing with Ovo is a rather good idea?

I mean from 01/04/22, Ovo/Shell would be £1083/£776, equating to 39.6% above the 01/04/22 cap...

This is within the upper acceptable limit of 40% right?


Thanking you in advance,

With Kind Regards


 

MattMattMattUK

Nardge said:

Good afternoon,


I'd be grateful if you could help confirm/refute the reasoning below, as I consider returning to a fixed/capped rate from the current standard variable one.

I'm currently with 'Shell' for my Energy, all runs off electric, I have no gas.

Shell recently announced I'd be paying £776/year from 01/04/22 (previously £536/year).

Yesterday (11/03/22) 'Ovo' released a fixed/capped deal in the MSE Energy Club.

This Ovo deal would see payment of £1083/year from 01/04/22 (previously £536/year).

Martin has suggested considering fixing/capping up to 25% above the 01/04/22 rise, with 40% being the upper limit...

Since prices increases haven't plateaued, my logic/mathematics suggests that fixing with Ovo is a rather good idea?

I mean from 01/04/22, Ovo/Shell would be £1083/£776, equating to 39.6% above the 01/04/22 cap.

This is within Martin's upper acceptable limit of 40% right?


Thanking you in advance,

With Kind Regards

Ignore direct comparisons of the monthly direct debit, that is just paying money into a pot to be allocated against a future bill.

You need to look at your annual usage in kWh and then the unit rate and standing charge and work out what it is going to cost you properly, rather than some vague comparison offered by the providers. 

Nardge

MattMattMattUK said:

Ignore direct comparisons of the monthly direct debit, that is just paying money into a pot to be allocated against a future bill.

You need to look at your annual usage in kWh and then the unit rate and standing charge and work out what it is going to cost you properly, rather than some vague comparison offered by the providers. 

Right, I'll endeavour to do that  P.S. I don't know if it'd change what you've said, but the price comparison figures were those of Martin Lewis' Cheap Energy Club.  

MattMattMattUK

Nardge said:

MattMattMattUK said:

Ignore direct comparisons of the monthly direct debit, that is just paying money into a pot to be allocated against a future bill.

You need to look at your annual usage in kWh and then the unit rate and standing charge and work out what it is going to cost you properly, rather than some vague comparison offered by the providers. 

Right, I'll endeavour to do that  P.S. I don't know if it'd change what you've said, but the price comparison figures were those of Martin Lewis' Cheap Energy Club.  

Not really, because they still rely on some assumptions, where as you can be sure things are correct if you do it yourself. 

The difficult part of the answer is that fixing now, or not fixing now, either choice is a gamble, no one can really be sure, although some might be able to make slightly more educated guesses than others. Martin is very clear that he does not have a crystal ball, so his estimates for fixing could be right, or could be very wrong, the Russian invasion of Ukraine being a huge variable that makes things even harder to predict. 

EssexHebridean

If you are absolutely certain the the usage figures in the Cheap Energy club are accurate to what you use, and are not based on any form of assumption, then that’s a slightly different slant on things, BUT I’d suggest that to be confident of accuracy you should probably have reworked and checked those figures inside the last three months or so.