Is it worth fixing?

euronorris

Hi Guys

BG have finally contacted me to let me know what the new rates will be from 1 May (when our current tarriff ends following solr process).

There are finally some fixed rate deals showing. One of which is for 12 months, and the charges work out (overall) about 24.4% more expensive than the April price cap, based on our usage. For the period May to end of September, this would be about £194 extra ( in reality less as we go into the warmer months, but that would be worst case estimation).

I remember a suggestion that it may be worth fixing if a deal comes up that us around (or less) than 25% more than the current cap, but that was weeks ago. Does that advice still stand? What are the current estimates for the October price cap increase?

Thanks in advance.

macman

The problem with fixing now is that you will be paying 24.4% more for 6m, in order to make a potential saving of ?% over the following 6m. That could be quite a gamble, as the October increase has to be high enough to recover the extra you have paid for the first 6m.

QrizB

There's a detailed study by @victor2 for a thread asking a similar question:

https://forums.moneysavingexpert.com/discussion/comment/79113515/#Comment_79113515

If you're handy with numbers you can use the same model to work out how much you'll spend each month on the fix, how that comapres to the current cap and how much the October cap would have to rise by for your fix to be worthwhile.

euronorris

Thanks for that link @QrizB I'll run those figures tonight to see if it's likely to be worth our while or not.

euronorris

Thanks again @QrizB approaching in that way really helped clarify it in my mind. The fix would end up working out at approx £120 more expensive over the year, for us, so will stick with the SVR for now.

Thanks again.

QrizB

No problem, all I did was point you to @victor2 's calculations!

Glad it has helped you make a decision.