Help with understand octopus

kirsty2206

Hi, my fixed price is up in march and had an email from octopus saying they’ll put me on a their flexible tarriff. However they’ve quoted a monthly direct debit of £480 a month a big jump from £210 what I pay Now. Should it still be under the price cap? Because the units per kWh are a lot higher? Thank you 

Spoonie_Turtle

kirsty2206 said:

Hi, my fixed price is up in march and had an email from octopus saying they’ll put me on a their flexible tarriff. However they’ve quoted a monthly direct debit of £480 a month a big jump from £210 what I pay Now. Should it still be under the price cap? Because the units per kWh are a lot higher? Thank you 

What unit rates are they quoting you for the Flexible tariff?

What's your actual annual usage, in kWh?

[Deleted User]

Your DD is just money that you put on account from which energy charges are deducted. The flexible tariff set by Octopus will be below the Cap (I believe by £50) but the Cap is not a limit on what you pay as it is based on assumed usage. Use more: pay more.

You need to calculate your annual usage in kWh/year; look at your new tariff prices and calculate your new annual cost. Energy costs have increased in the past year.

Qyburn

With Octopus you can choose variable Direct Debit, so each month you pay exactly what you've used. You just need to be prepared for higher bills in the Winter.

What standing charge and unit prucevhave they quoted, or will it not kick in until April in which case they probably don't yet know? 

Raxiel

If you're on the SVT (Flexible Octopus) then its still under or at the price cap, because that's what the cap is.

In my experience, Octopus very much err on the side of caution with the direct debits. Their recommendation to me over last winter didn't take the £400 into account or the EPG when it was implemented. Fortunately Octopus do let you set your own payment amount so you can adjust it down if your own calculations suggest its too high.

Start by taking a look at the "Balance Forecast" feature on the website, it seems a bit more dynamic than whatever code they use in the direct debit section.

tripled

A direct debit is a method of paying for your energy bills in instalments, not a fixed charge. It will be periodically adjusted based on your actual bills to ensure it covers them, and if you are in arrears, this will be taken into account in setting the DD.

The energy price cap is a figure set by OFGEM of the maximum price a supplier can charge per kWh for gas and for electricity on their standard (Flexible) tariff, and will vary slightly by region. It does not cap your total bill.

There's also the energy price guarantee, this is a government scheme to give a partial rebate on bills when the price cap is above a certain level. Your fixed tariff may well have been cheap enough not to qualify for this. The threshold before a rebate kicks in is being increased from April, and so bills for those on standard tariffs will increase.

Energy costs have more than doubled over the past couple of years, even with the price cap and guarantee. Octopus Flexible rate is compliant with the price cap and they actually charge slightly less on the standing charge.

Finally you have the energy bills support scheme, a credit of £66-£67 per month over the winter, which will end in March.

Whether or not your direct debit is appropriate will depend on your individual circumstances, however, you would expect a jump as you would no longer be getting the £67 credit after March, and energy costs have likely risen considerably while you've been on your fix. Based on the limited information, the new DD is plausible.

kirsty2206

Hi, so the rates they’ve quoted are attached. My annually usage of electricity is 4,779 (electric car) and gas 13,229. When I did the calculator on here is said £280 ish. 

So if I am in credit each month at a dd of £480 I could lower it with octopus? 

Thank you all for your help

MikeJXE

I'm moving home next week and the suppliers are Octopus

I have already spoken to them regarding my DD and given them my annual usage which is low

I am leaning towards variable DD whole month 

I don't want to start with a low DD in February and be in debt, I would  rather pay for what I use 

bagand96

kirsty2206 said:

Hi, so the rates they’ve quoted are attached. My annually usage of electricity is 4,779 (electric car) and gas 13,229. When I did the calculator on here is said £280 ish. 

So if I am in credit each month at a dd of £480 I could lower it with octopus? 

Thank you all for your help

Electricity
4779 kWh x 68.49p = £3273.14
365 days x 37.29p = £136.11
Annual Electricity = £3409.35

Gas
13229 kWh x 17.06p = £2256.87
365 days x 26.84p = £97.97
Annual Gas = £2354.84

Total annual energy cost = £5764.10.  So the Octopus estimate seems pretty spot on. Divide it by 12 and the £480 a month also seems right.

Keep in mind those rates will be discounted to the Government Energy Price Guarantee, but only until the end of March. If you do a quote on the Octopus website you'll see an example of this: (these are for my region so there will be slight differences in the numbers)

Tariff cost breakdown

 Electricity

Daily standing charge	44.12p /day
Unit rate	66.24p /kWh
Reduced unit rate (Energy Price Guarantee discount)	32.81p /kWh

 Gas

Daily standing charge	26.84p /day
Unit rate	16.98p /kWh
Reduced unit rate (Energy Price Guarantee discount)	10.24p /kWh

The problem with the calculator you've used on this site is using those discounted prices for the annual calculation, whereas they will rise in April.

Spoonie_Turtle

As already mentioned those rates are without the government's EPG discount.  We don't know what that will be come April, but realistically you're not going to find a better deal than Octopus' Flexible with their reduced standing charge, unless you look into tariffs like Agile or Tracker and become confident you understand how they work (also from Octopus). 


The Flexible is the capped standard variable tariff, and if you do find a better tariff at any point you can switch to it with no exit fee.

kirsty2206

That makes more sense thank you! I don’t want to change as octopus have been brilliant just wanted to understand a bit more. Thank you all