Am i missing something - Is this SVR a better gamble than the fixed rate offered?

MissFlomeister

Hi, so i may be missing something really obvious, and i've watched lots of Martin's videos, but looking at the numbers from Ovo, as my 2yr fix is coming to an end mid-sept, i believe going onto the variable rate works out better than the fixed options, even if the rates go up? Can anyone confirm my thoughts or give me good reasons that the fixed rates are a safer option? 
My annual summary is that i use Elec - 3746kwh units and Gas - 8730 kwh units. On my current fix i was paying £802 for the year/£67pm, rates were Elec 14.94/kwh and 23.19SC, Gas 2.77/kwh and 24.79SC 
using the picture below and new rates offered today, the cheapest 1 year fix is coming in at £4,020 per year - almost 500% increase though, whereas one year on the current variable rate is £1,382.87 or £115pm based on my usage. (I know the rates will fluctuate) 
So even if the variable rate increases, its got to almost double before it hits the fixed rates - correct?? 
i've done the sums on my lowest and highest usage months and the fixed is £206 vs the SVR £112/pm for the lowest use month, and the fixed is £499 vs the SVR £249 for the highest use in winter - a huge difference. 
Can anyone spot an error in my thinking or suggest questions i can ask Ovo to clarify?
 

 

pochase

Current prediction for October is

Gas 14.5p kWh

Elec 46.5p kWh

going up in January and April to

Gas 16.3p kWh

Elec 51.9p kWh

So yes, the SVT seems to be cheaper than the fixed tariff. Especially as we are now getting very near to the day the official cap will be announced end of this months.

Just keep in mind nobody knows what is going to happen, a cap increase like we will have for October was thought impossible, many missed on "overpriced fixed tariffs" in spring which now sound like dreams.

[Deleted User]

I agree. It comes down to one’s personal attitude towards risk, and one’s own market judgement. A capped tariff may offer less cost in the short-term but it may cost more in the longer-term. A fix may cost more in the short-term but you can stop worrying about energy prices for the duration of the fixed period.

That said, as many people are finding out at the moment. Coming off what was, in today’s terms, a cheap fixed tariff results in a staggering cost increase.

Finally, supplier uncertainty about the movement of the market is reflected in high exit fees. The last thing suppliers want is for customers to jump ship if prices fall. They would be left with a lot of expensive energy that they would have to sell on at a loss.

fergie_

What we need is for competition to return to the market - there is simply none. Its a choice of a SVR or an extortionate fix that prices in future 'expected' increases. 

As soon as some companies can start offering cheaper that SVR again, it starts to get competitive.

[Deleted User]

fergie_ said:

What we need is for competition to return to the market - there is simply none. Its a choice of a SVR or an extortionate fix that prices in future 'expected' increases. 

As soon as some companies can start offering cheaper that SVR again, it starts to get competitive.

That will only happen if the Cap starts to look forward rather than backwards.