Advice needed for going for fixed

Planeteer

Hi, I have never been on a fixed rate, but rattled after £6k forecasts in papers today and feeling a bit nervous/nauseous about committing to unit prices that are 2.23x current units, so I'd like to lay out my thinking and welcome thoughts from wiser people here

1. Ex-Avro, now Octopus on SVT, considering fix at E 69.08 (SC 31.878) + G 19.037 (SC 27.216), no exit charge.

2. Annual usage profile: E 1000 kwh, G 7500 kwh (2 person, 4-room detached, Gas Combi Boiler for central heating, London, no kids/cars/cats).

3. Winter profile: From 1/9-1/2, we expect to be out of country for 3.5 months.

Given #3, I'm thinking of biting the bullet by hedging for post-Feb bills now with fix. However, I am paying over expected caps for next 6 months, and only getting 6m fix for the remainder under (presumed) cap. 

Fix now?

MattMattMattUK

Planeteer said:

Hi, I have never been on a fixed rate, but rattled after £6k forecasts in papers today and feeling a bit nervous/nauseous about committing to unit prices that are 2.23x current units, so I'd like to lay out my thinking and welcome thoughts from wiser people here

1. Ex-Avro, now Octopus on SVT, considering fix at E 69.08 (SC 31.878) + G 19.037 (SC 27.216), no exit charge.

2. Annual usage profile: E 1000 kwh, G 7500 kwh (2 person, 4-room detached, Gas Combi Boiler for central heating, London, no kids/cars/cats).

3. Winter profile: From 1/9-1/2, we expect to be out of country for 3.5 months.

Given #3, I'm thinking of biting the bullet by hedging for post-Feb bills now with fix. However, I am paying over expected caps for next 6 months, and only getting 6m fix for the remainder under (presumed) cap. 

Fix now?

No one can tell you either way because it is a gamble and it depends on your own appetite for risk. The only part you will be below the cap is for the low usage summer period. I am sure someone will be along to do the maths shortly, but remember that the £6k is only an educated guess at the moment, a mild winter could see that lower than £5k, a harsh winter and further pressures on demand from China could see that go even higher. It's a gamble either way, are you feeling lucky? 

Planeteer

Fair enough and of course, my call. Just thinking that Feb to Apr will definitely need heating (last winter till May?)...

MattMattMattUK

Planeteer said:

Fair enough and of course, my call. Just thinking that Feb to Apr will definitely need heating (last winter till May?)...

Having he heating on until May seems very late in the year as March and April were not cold. Your usage is not high so I am guessing they you have already cut down/insulated, or is a huge part of that due to bring out of the country for three months every winter?

Planeteer

Sorry meant last year's winter, not this winter gone - thought it was colder for longer last year. 

I realise that the 4-5-6 k numbers aren't real usage, but they do reflect a %change in unit prices after all.

Of course, I could also hold my breath and surf the caps 🙄 

MattMattMattUK

Based on your usage figures and the estimated caps, the below might help you make a decision. The October cap is unlikely to move much, if at all (it is announced in five days time), the January cap figure is still a moving target.

October 2022 cap £1,936.82 pa / £161.40 pcm
January 2023 cap £2,456.57 pa / £204.71 pcm

Planeteer

Thank you very much for the calcs! Just a bit surprised by your comment they won't move much in Oct - aren't the rates going up by 80% for Oct?

FYI, Octopus 12m fix is showing as £196 pm projected.

MattMattMattUK

Planeteer said:

Thank you very much for the calcs! Just a bit surprised by your comment they won't move much in Oct - aren't the rates going up by 80% for Oct?

Sorry for the confusion, I mean that the current cap estimates are estimates, but as the reference period has closed it is unlikely to move from those predictions, not that is will not increase in terms of cost. The Jan 23 cap is still a moving target as the reference period is still open. 

Planeteer said:

FYI, Octopus 12m fix is showing as £196 pm projected.

They will probably be aiming a little high, but your usage is low so that is not surprising. 

Planeteer

Ah, I understand now - thank you. So if I think through your inputs, you're saying that by January the likely price cap rate will already be higher than the current fix rate, and from what we see right now, there's only more upside to Jan rates, right?

QrizB

Planeteer said:

1. Ex-Avro, now Octopus on SVT, considering fix at E 69.08 (SC 31.878) + G 19.037 (SC 27.216), no exit charge.
2. Annual usage profile: E 1000 kwh, G 7500 kwh (2 person, 4-room detached, Gas Combi Boiler for central heating, London, no kids/cars/cats).
...
Fix now?

You'll get a better deal switching to Octopus Tracker; variable but no higher than E 55p/kWh, G 16p/kWh, fixed for 12 months. Daily SC the same as the fixed offer.

https://octopus.energy/tracker/

If the Tracker prices stay at their upper limits, I make that £1965/yr, £164/mo.

Planeteer

Thank you, the ceiling does sound interesting, but I couldn't find any mention of it yet? Do you know how long the ceiling might apply till? Are you already on it - I'll have to wait for an invitation.