Do I switch to fixed deal?

jj_43

Krakkkers said:

Would you run a business with 1.9% profit?, may as well sell up and put the money in a bond paying 3.5 %.

It’s does not work that like. 1.9% on a return of capital is not the same as 3.5% return on a bond.
As you suggest therefore why do energy companies exist? 

jj_43

Don’t fix. Choosing a fix isn’t a good idea. 1) energy supplier costs are much higher (risk premium) so you pay more, 2) profits are higher as it’s not subject to SVT cap, 3) typically people are scared into fixing at the highest price, 4) choosing to purchase your energy at one price isn’t best practice, 5) fixing doesn’t equal hedging.

[Deleted User]

Or do fix.  Choosing a fix can be a good idea. 1) You have certainty about the rate you will pay for each unit throughout the whole contract, your price will be directly related to your usage, 2) Suppliers have lost money several times by offering fixes that were below cost, 3) people who fixed in June, July and August this year have fixed at a lower price than offered now, 4) choosing certainty to help budgeting can be best practice, 5) you're not a company so you don't need to hedge

jj_43

Better alternatives to fixing that will save you money. 1) Understand your energy usage, 2) use less, 3) if on prepayment top up, 4) stay on SVT ( it’s the best fix), 5) don’t be captain hindsight.

jj_43

Don’t be Captain Hindsight , fixes are priced at current forward energy prices. 

Steve_79_P

Or fix. It's a gamble. I have fixed whenever the fixed rate offered reached the upper limit of what I am able to pay without affecting my lifestyle/budget. Sometimes I win, sometimes I lose. I'm happy with my fixes this year:

Gas 2 year fix ends Mar 24 s/c 26.11 per day, unit rate 8.61p kWh.

Electric 1 year fix ends sept 23 s/c 42.18 per day, unit rate 38.8p kWh

I should have fixed the electric earlier, but missed that boat by dithering. I am always more cautious of fixing electric as we are v high user (9000 kWh per year Vs 10000 kWh gas) and the electric usage is pretty constant month to month, whereas we use precious little gas during the summer (gas ch). Fixing too early with high usage means I pay over the odds for several months before the cap rises to match/exceed my price.

With low/no exit fees £60 gas £nil electric I can leave of anything drastic happens.

Having said all this I probably would not fix at today's rates. I feel the predictions next year are reaching the maximum sustainable without intervention. The worst rates are April onwards, when most people won't use much energy.

[Deleted User]

Most importantly - if someone says "you should always do X under all circumstances" to a question that has uncertainties in it, then they're probably wrong.  

FreeBear

Deleted_User said:

Or do fix.  Choosing a fix can be a good idea. 1) You have certainty about the rate you will pay for each unit throughout the whole contract, your price will be directly related to your usage, 2) Suppliers have lost money several times by offering fixes that were below cost, 3) people who fixed in June, July and August this year have fixed at a lower price than offered now, 4) choosing certainty to help budgeting can be best practice, 5) you're not a company so you don't need to hedge

My current fix runs out at the beginning of October. Missed the boat for the (in hindsight) cheap fixes that were on offer over the summer. Procrastinated about renewing the fix and finally decided it would be worth it on the 24th. Following day, the rates on offer went up - Looking at my crystal balls, I reckon rates will climb even higher come January.

jj_43

Steve_79_P said:

Or fix. It's a gamble. I have fixed whenever the fixed rate offered reached the upper limit of what I am able to pay without affecting my lifestyle/budget. Sometimes I win, sometimes I lose. I'm happy with my fixes this year:

Gas 2 year fix ends Mar 24 s/c 26.11 per day, unit rate 8.61p kWh.

Electric 1 year fix ends sept 23 s/c 42.18 per day, unit rate 38.8p kWh

I should have fixed the electric earlier, but missed that boat by dithering. I am always more cautious of fixing electric as we are v high user (9000 kWh per year Vs 10000 kWh gas) and the electric usage is pretty constant month to month, whereas we use precious little gas during the summer (gas ch). Fixing too early with high usage means I pay over the odds for several months before the cap rises to match/exceed my price.

With low/no exit fees £60 gas £nil electric I can leave of anything drastic happens.

Having said all this I probably would not fix at today's rates. I feel the predictions next year are reaching the maximum sustainable without intervention. The worst rates are April onwards, when most people won't use much energy.

I agree. Current high prices are not sustainable and there will be better fixes in the future. Remember SVT is a fix that has been hedged over prior months. This is better than choosing todays fix which is not hedged and priced at todays price. A hedged product is better.

flopsy1973

[Deleted User] said:

Comparing your fix with two different recent predictions - just your energy use without the extra services.





I don't get the same direct debit predictions as they are offering you.  Are you sure they're using these annual usage figures?

Looks like a great deal compared to the most expensive recent prediction, but not so good value compared to the cheapest recent prediction (less than £10 per month cheaper and it doesn't include the extra services you would need to take).

It's up to you whether you think reality will be better/worse/the same as any prediction.  Guessing next year's caps at this point isn't an accurate science.

Hi thanks for that I gave them the same figures as above so I don't understand why you have a lower monthly amount any ideas ? 
How accurate have these predictions been in the past to accurately reflect the future prices? 
Also I will be paying £218 more for their other services than currently paying so that also has to be factored with UW