To fix or not to fix?

bbbbecca7

Hi everyone 

I’m hoping I can get some advice re energy costs.

i thought I was being super savvy last September when I beat the October 2021 rise and fixed on a one year plan.. not feeling so savvy now when my plan comes to an end next month just in time for another rise (+ the rest!)

Im with British Gas and I currently pay:

Gas
3.955p per kWh  
standard charge=24.794p

Electricity 
20.208p per kWh
standard charge=25.131p

at the end of my plan they are offering me a fixed plan for a year at the following rates:

Gas
16.737p per kWh  
standing charge=24.480p

Electricity 
60.265p per kWh
standing charge=31.105p

This takes my direct debit up from £120 to a whopping (in my opinion) £299


im obviously massively concerned as to how I am going to afford the next years energy as I know everyone will be. I budget months in advance and like to know what my bills are going to be so I can prepare so the prospect of the unknown scares me a little bit.
however with Martins advice being not to fix unless you can find a deal that is “only” 95-100% higher I am a bit confused. Since I’m on a low fixed rate from last year the new deals are obviously incredibly higher. I’ve also seen news reports of rumours of the price cap being frozen.. which I’m assuming would make it better to stick to the variable rate?

any advice or help would be massively appreciated! 

AlexLS

In a similar position; fix ending 18th Sept.  The fix rate being offered is very slightly cheaper than current SVR + 82%, and then there's the expected 19% Jan increase to consider.
So, AIUI, assuming there is no exit fee, it makes sense to register for the fix and then either stick with it or cancel it and go back to SVR depending on what's announced at the end of the month. I guess the risk is that they could withdraw the current fix and replace with a higher one if it becomes clear that the cap will rise?

BUFF

bbbbecca7 said:

Hi everyone 

I’m hoping I can get some advice re energy costs.

i thought I was being super savvy last September when I beat the October 2021 rise and fixed on a one year plan.. not feeling so savvy now when my plan comes to an end next month just in time for another rise (+ the rest!)

Im with British Gas and I currently pay:

Gas
3.955p per kWh  
standard charge=24.794p

Electricity 
20.208p per kWh
standard charge=25.131p

at the end of my plan they are offering me a fixed plan for a year at the following rates:

Gas
16.737p per kWh  
standing charge=24.480p

Electricity 
60.265p per kWh
standing charge=31.105p

This takes my direct debit up from £120 to a whopping (in my opinion) £299


im obviously massively concerned as to how I am going to afford the next years energy as I know everyone will be. I budget months in advance and like to know what my bills are going to be so I can prepare so the prospect of the unknown scares me a little bit.
however with Martins advice being not to fix unless you can find a deal that is “only” 95-100% higher I am a bit confused. Since I’m on a low fixed rate from last year the new deals are obviously incredibly higher. I’ve also seen news reports of rumours of the price cap being frozen.. which I’m assuming would make it better to stick to the variable rate?

any advice or help would be massively appreciated! 

afaik Martin's advice is based on current SVR rates to expected Oct. SVR pricing, not from a fixed tariff. "If you're offered a year's fix at no more than 95% above your current price-capped tariff, or 100% more if you very strongly value budgeting certainty, it's worth considering."

The rates that you have been offered are a litlle higher than are currently forecast for the expected Oct. SVR but cheaper than currently forecast for the following 3 quarters.
All the current talk about what the govt . could do to give further relief throws a bit of additional uncertainty though about what actually will happen.

pochase

When dose your current fix end? 

You need to include the price difference between current SVT and fixed tariff for the time before October into your calculations.

bbbbecca7

AlexLS said:

So, AIUI, assuming there is no exit fee, it makes sense to register for the fix and then either stick with it or cancel it and go back to SVR depending on what's announced at the end of the month

Exit fee of £100 I’m afraid 😫 hopefully there’ll be a bit more clarity on what government help may be offered before it’s time to fix! … and hopefully the package isn’t removed or increased before then! 

bbbbecca7

pochase said:

When dose your current fix end? 

You need to include the price difference between current SVT and fixed tariff for the time before October into your calculations.

It ends on the 30th September .. crunch time! Really cutting it fine before the hike 😰

bbbbecca7

BUFF said:

All the current talk about what the govt . could do to give further relief throws a bit of additional uncertainty though about what actually will happen.

Exactly this! 😅 knowing my luck I will fix and they’ll throw some massive relief package in or freeze the cap which I won’t benefit from if I’ve fixed. Some very important and expensive decisions to be made! .. great time to be on maternity pay as well 😂

Astria

bbbbecca7 said:

pochase said:

When dose your current fix end? 

You need to include the price difference between current SVT and fixed tariff for the time before October into your calculations.

It ends on the 30th September .. crunch time! Really cutting it fine before the hike 😰

tbh, you are going to get a very similar hike anyway whether you take a fix or not, all the good fixes have already gone. Personally I would avoid any fix that has an exit fee of £100 or more as surely if they are going to be less than the SVR over 12 months then there wouldn't be a need for a exit fee as you are unlikely to leave anyway.

That said, the price cap is announced in 10 days time, so you could apply now and withdraw under the 14 days cooling off period if it happens to be more expensive, but there could be another rise in January and April next year too.

sienew

bbbbecca7 said:

BUFF said:

All the current talk about what the govt . could do to give further relief throws a bit of additional uncertainty though about what actually will happen.

Exactly this! 😅 knowing my luck I will fix and they’ll throw some massive relief package in or freeze the cap which I won’t benefit from if I’ve fixed. Some very important and expensive decisions to be made! .. great time to be on maternity pay as well 😂

You have a 14 day cooling off period which you can cancel a contract so any switch you make today will be after the next price cap announcement so the risk now is minimal. 

sienew

bbbbecca7 said:

AlexLS said:

So, AIUI, assuming there is no exit fee, it makes sense to register for the fix and then either stick with it or cancel it and go back to SVR depending on what's announced at the end of the month

Exit fee of £100 I’m afraid 😫 hopefully there’ll be a bit more clarity on what government help may be offered before it’s time to fix! … and hopefully the package isn’t removed or increased before then! 

It's very unlikely what you are offered today will be valid in even a weeks time.

Fixing now is more of a gamble but once the price cap and govt action is clear it won't be a gamble and the fixes will change to reflect that so the chance of their being any deals better than the price cap available at that point are very slim.

jimjames

bbbbecca7 said:

. I’ve also seen news reports of rumours of the price cap being frozen.. which I’m assuming would make it better to stick to the variable rate?

No rumours. It's just the leader of opposition proposing the cap be frozen. They're not in power so the chances of happening are minimal.