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Octopus energy telling me my fixed tariff is variable - help!

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Greetings all. I moved house last summer, and signed up with Octopus for their fixed tariff. Or so I thought. Now they tell me it was fixed TERM and not fixed PRICE. Can they get away with this? 

I'm not being funny but I'm an academic in English and nowhere in my paperwork when I signed up does it mention the word 'variable'. Should I contact trading standards or have I been massively dim and missed the obvious?

Further info below
----

I initially sent them this after they said my usage would go from £1000 a year to £2500:

This email really stressed me out when I saw the figures; it didn't seem right to me. I'm so glad I checked, because I am on a fixed tariff for gas and electricitiy with you until 30 September 2023 (details attached FYI). According to the Citizens' Advice Bureau you can't increase my charges during the period of this tariff. Can you please confirm that this is your understanding as well? 

I've always been really pleased with Octopus but as a vulnerable customer with multiple disabilities, today's email wasn't at all helpful and had a considerable impact on my physical and mental health. You may want to think about how best to help other customers like me.

Best wishes,

---

Reply 1, 9 days and 2 prods later:

Good evening

I hope you are well!

The Price Promised is a fixed term tariff but the rates are Variable based on the Price Cap rates, your bills will show it as a Variable and this is how it was explained when it was brought out 

Kind Regards,

--- 

reply 2:

Octopus Price Promise is a two year tariff (starting in September 2021 and ending September 2023) it is a Variable Tariff with a fixed term not a Fixed Rate Tariff. During that two years, we guarantee your energy prices are always below OFGEM's Energy Price Cap so they only change twice a year not every month as is with the current Octopus Flexible Tariff.

On Octopus Price Promise, we will change your unit price and standing charge when the Government sets a new price cap level - this happens twice per year in April and October. Once we know the price the cap is set at, we’ll automatically recalculate your tariff rates to ensure they’re always at least £50 cheaper. Like all our tariffs, there are no exit fees so you are not locked-in in any way if you want to change tariff, or even supplier. You can do this at any time and can ask for quotes for different tariffs whenever you like.

This tariff is very different to a Fixed Rate Tariff, where the price is usually a lot higher. For this reason I have to advise that we aren't breaching our contract with you in regards to this email but if you are unhappy on this tariff we are happy to help you move to a different one in its place.

---


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Comments

  • MWT
    MWT Posts: 10,196 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    This tariff will have already changed prices once back in October as it is a cap tracking tariff.
    All the pre-sales material made this clear, but some managed to get onto the tariff without reading that material...
    How did you get on to the tariff? Did you ask for it by name or was it suggested during a phone call?
    Similarly check the email you would have got at the time when you first moved onto the tariff, some of those did not make it clear that it was a tracker tariff...
  • Thanks. I think it was just online. Here is what they sent me when I joined. I said I was a light user. I still don't see anything telling me it's a tracker tariff - I don't understand how they can now say that my rate changes. Sorry for being dim!

    Dear ______, welcome aboard!
    We believe energy should be better. Better on your pocket. Put to better use throughout the home.
    Better for the planet. Just better all round, really. That's why we started Octopus Energy.
    Below you'll find all the information you need as you join us on our journey. It's important that you
    understand us and that we understand you, so let us know if you spot any details that aren’t right.

    Your estimated annual cost is £765.16
    Your estimated annual cost is based on a usage of 1,800 kWh of Electricity and 8,000 kWh of Gas, which
    were the details you gave us when you signed up. It may change with usage and will become more
    accurate with regular readings.

    Your payment details
    We've set your Direct Debit to £63.76, based on your estimated annual cost. We'll collect an initial
    payment on your first day of supply (which is currently scheduled for 2nd August 2021) and on the 25th
    of each month thereafter.
    You can cancel your Direct Debit at any time by contacting your bank or building society.

    Your tariff information
    About your electricity tariff
    Supplier Octopus Energy Limited
    Tariff name

    Octopus Price Promise July 2021
    V1
    Tariff type Fixed
    Payment method Direct Debit
    Unit rate 18.13p per kWh
    Standing charge 26.20p per day (£95.62 per year)
    Tariff ends on 30/09/2023
    Price guaranteed until 30/09/2023
    Exit fees (if you cancel
    this tariff before the end
    date)

    Not applicable

    Discounts and additional
    charges Not applicable
    Additional products or
    services included Not applicable
    Illustrative electricity cost on this tariff
    Assumed Annual
    Consumption 1,800 kWh
    Estimated Annual Cost

    See your estimated annual cost
    (page 1)
    Tariff Comparison Rate (TCR) 21.43p per kWh
    Supply of electricity is subject to 5% VAT. This is included in the
    prices and costs above, and may mean charges are displayed
    differently on a statement of account.

    About your gas tariff
    Supplier Octopus Energy Limited
    Tariff name

    Octopus Price Promise July 2021
    V1
    Tariff type Fixed
    Payment method Direct Debit
    Unit rate 3.13p per kWh
    Standing charge 25.43p per day (£92.82 per year)
    Tariff ends on 30/09/2023
    Price guaranteed until 30/09/2023
    Exit fees (if you cancel
    this tariff before the end
    date)

    Not applicable

    Discounts and additional
    charges Not applicable
    Additional products or
    services included Not applicable
    Illustrative gas cost on this tariff
    Assumed Annual
    Consumption 8,000 kWh
    Estimated Annual Cost

    See your estimated annual cost
    (page 1)
    Tariff Comparison Rate (TCR) 3.87p per kWh
    Supply of gas is subject to 5% VAT. This is included in the prices and
    costs above, and may mean charges are displayed differently on a
    statement of account.

    Frequently asked questions
    •What is a kWh?
    A kWh stands for a kilowatt-hour – the unit used to measure energy use. 1 kWh will power a 40-watt
    light bulb for 25 hours.
    •What is the Tariff Comparison Rate (TCR)?
    TCR is a rate per kWh that allows you to compare your tariff to other tariffs by taking account of the
    unit rate and standing charge. It is calculated from national average consumption values. A TCR does
    not apply to Economy 7 meters.
    About your tariff
    You’ve selected our Octopus Price Promise tariff. This means that your energy bill will reflect the amount of
    energy you use each month, but the price you pay per unit is fixed. Like all our tariffs, it is online only.
    Once your fixed term is up, we’ll move you to our cheapest standard tariff. This is a rolling tariff (there is no
    minimum contract period) and has no exit fees, though you should be aware that this tariff may be either slightly
    cheaper or slightly more expensive than your fixed tariff. Rest assured – we’ll be in touch 45 days before your
    agreement expires to explain your options.
  • Particularly the bit that says:

    Tariff type Fixed [it doesn't say fixed TERM; it implies fixed cost since 'price is guaranteed until 30/09/2023']

    Payment method Direct Debit
    Unit rate 18.13p per kWh
    Standing charge 26.20p per day (£95.62 per year)
    Tariff ends on 30/09/2023
    Price guaranteed until 30/09/2023
  • MWT
    MWT Posts: 10,196 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    edited 23 March 2022 at 1:06PM
    Thanks. I think it was just online. Here is what they sent me when I joined. I said I was a light user. I still don't see anything telling me it's a tracker tariff - I don't understand how they can now say that my rate changes. Sorry for being dim!

    If you saw the product details on line then it was made clear there that it was a tracker tariff, the emailed information did not make it clear enough I agree.
    That means that the price calculation method was fixed and linked to the Ofcom cap, but if the cap changed then so would the tariff.
    All you can do is raise it as a compliant, but I'm surprised you didn't notice the prices going up in October, what kWh rate are you on right now?.


  • Ultrasonic
    Ultrasonic Posts: 4,265 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    For future info., what all 'fixed' energy tariffs do is fix the standing charges and unit prices for the contract term. How much anyone has to pay depends on how much energy they use, with direct debit amounts adjusted as needed to cover this.
  • k_man
    k_man Posts: 1,636 Forumite
    1,000 Posts Second Anniversary Name Dropper
    For future info., what all 'fixed' energy tariffs do is fix the standing charges and unit prices for the contract term. How much anyone has to pay depends on how much energy they use, with direct debit amounts adjusted as needed to cover this.
    In this case, the tariff type is referred to as Fixed, but the unit rates are changing, in line with the Price Cap.
  • niktheguru
    niktheguru Posts: 1,487 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    This same tariff has been discussed in the past i seem to remember. The emailed details contradicted the actual terms of the tariff. I believe some people have argued it with octopus and had managed to get to an agreement. You'll have to search through the different octopus threads to find this.

    Your paperwork suggests it was a "fixed tariff", meaning the unit rate and standing charge should be the same for the full 2yr term, the price you PAY will vary depending on how much energy you use. (you use a lot, you pay a lot)

    The actual terms of the tariff are more like a tracker, where the unit rate and standing charge can increase at certain times of the year.....this is NOT included in your email, so you can potentially argue that this wasn't made clear and you wouldn't have signed up for it had you known this was essentially a variable rate tariff.

    Good luck.
  • Ultrasonic
    Ultrasonic Posts: 4,265 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    k_man said:
    For future info., what all 'fixed' energy tariffs do is fix the standing charges and unit prices for the contract term. How much anyone has to pay depends on how much energy they use, with direct debit amounts adjusted as needed to cover this.
    In this case, the tariff type is referred to as Fixed, but the unit rates are changing, in line with the Price Cap.
    Hence my 'For future info...'
  • MWT
    MWT Posts: 10,196 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    edited 23 March 2022 at 2:14PM
    k_man said:
    For future info., what all 'fixed' energy tariffs do is fix the standing charges and unit prices for the contract term. How much anyone has to pay depends on how much energy they use, with direct debit amounts adjusted as needed to cover this.
    In this case, the tariff type is referred to as Fixed, but the unit rates are changing, in line with the Price Cap.
    It should be clearer, it is a fixed calculation as is normal with tracker tariffs, but it will change if the base changes, but in a fixed way.
    The original marketing was very clear and extremely detailed with worked examples, it just isn't made clear enough in the subsequent emails.
  • jimjames
    jimjames Posts: 18,635 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 23 March 2022 at 2:17PM
    For future info., what all 'fixed' energy tariffs do is fix the standing charges and unit prices for the contract term. How much anyone has to pay depends on how much energy they use, with direct debit amounts adjusted as needed to cover this.
    Except the contract details apparently contradict the email and the unit prices are NOT fixed for the contract term. Future info or not, this is not a normal fixed rate deal.
    Remember the saying: if it looks too good to be true it almost certainly is.
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