Ovo now offering a fixed tariff for one year

Sea_Shell

MattMattMattUK said:

averageguy11 said:

dealyboy said:

I think there's too much uncertainty in the world for the next 12 months to be taking a punt on a fix.

Isn’t that uncertainty in the world a reason why a fix might be attractive?

Some would rather fix than risk prices rising, others would rather not fix so not risking being locked into a more expensive tariff, others might take the risk that if prices do rise on the wholesale side the government would step in and keep the cap at the nominal £2,500 figure with next year likely being an election year. Different people have different appetites for risk and different assessments of potential risk factors. 

The government have set a precedent now, that shows us that they will step in if prices get out of control.

Will this be seen as less need for personal responsibility to fix to avoid price shocks?

averageguy11

MattMattMattUK said:

averageguy11 said:

dealyboy said:

I think there's too much uncertainty in the world for the next 12 months to be taking a punt on a fix.

Isn’t that uncertainty in the world a reason why a fix might be attractive?

Some would rather fix than risk prices rising, others would rather not fix so not risking being locked into a more expensive tariff, others might take the risk that if prices do rise on the wholesale side the government would step in and keep the cap at the nominal £2,500 figure with next year likely being an election year. Different people have different appetites for risk and different assessments of potential risk factors. 

Oh i agree with everything you’ve typed….i was countering the comment about uncertainty …when a fix does give certainty ….it may or may not be the right thing to do…one weighs it all up and makes a decision…its been a while since its been an option with OVO.

I’ve had the email and will look closer over the weekend when I’ve more time, its not a decision i will make without a long think  

averageguy11

Sea_Shell said:

MattMattMattUK said:

averageguy11 said:

dealyboy said:

I think there's too much uncertainty in the world for the next 12 months to be taking a punt on a fix.

Isn’t that uncertainty in the world a reason why a fix might be attractive?

Some would rather fix than risk prices rising, others would rather not fix so not risking being locked into a more expensive tariff, others might take the risk that if prices do rise on the wholesale side the government would step in and keep the cap at the nominal £2,500 figure with next year likely being an election year. Different people have different appetites for risk and different assessments of potential risk factors. 

The government have set a precedent now, that shows us that they will step in if prices get out of control.

Will this be seen as less need for personal responsibility to fix to avoid price shocks?

You make an interesting point…..i guess it’s what the price of the fix is …and whether the appetite to step in remains in the future

Scot_39

The govt stepped in when there were rumours and predictions of £6000+ for TDCV by Xmas.

As it was they saved pro-rata shares of over £1000, £1700 and now £700 for three quarters - and gave everyone £400 EBSS on top.

At a cost of £10s bn over last 6m - with 3m at a lower level to come.

The facts that CofL living for the poorest is already running until spring 2024 - the £301+£300+£299 payments - suggests maintaining support for poorest homes - as temporary rather than a locked in UC / benefits rise.

And the EPG isn't disappearing - its just forecast to be worth £0 - as Ofgem cap forecasts from likes of CI - at c£2000 July are below current let alone £3000 EPG - but it nevertheless remains in theory in place at the higher £3000 - if forecasts aren't correct - until Mar 31 2024.

And of course EPG is the mechanism being used to compensate prepay (standing charge only?) excess charges until then.

So any speculation of additional help beyond that - is just that - speculation.

And the fact they dropped the Covid £20 UC uplift - shows they have an appetite for perhaps ending such help.

Just as they dropped Covid help - like furlough was capped for few months and then stopped - long before disease disappeared / ended (it still hasn't - 1 in 40 last week) / vaccination completed.

More help is a gamble you might like to make - perhaps in view that 2024 might be an election year - but it doesn't have to be (Jan 25 latest legal date ).

There are simply no guarantees.

Personally - anyone expecting cheap fixes to bounce back - to where they were - before over 30 resellers collapsed - might be waiting for a few years.  Old big 6 fixes weren't cheap - they charged a premium - and people took for the security.

Arguably the same was as a fixed rate mortgage - provides budgetting security - but others might say - no I'm going to go SVR - waiting for interest rates to drop. 

And as this week shows - on Mon forecasts were no rate rise, then new inflation in UK and USA action despite bank crashes - showed otherwise etc.

 

Given rates are expected to drop another c£500/20% from current EPG £2500 levels - by likes of CI - anything that looks close to their Q3/Q4 estimates - might well be a good derisking strategy for some.

Different people - will as always view the risks / rewards differently.

RavingMad

Unless a fix comes in at the same level of Octopus tracker, then I'm happy to stay on the tracker.
Cornwall insight is predicting rates of 33p/8.6p respectively in Q4 this year which baffles me as we are paying half that amount on the tracker? But this will be the price cap/ofgem rate and not market forces rate I'm guessing?

MWT

RavingMad said:

Unless a fix comes in at the same level of Octopus tracker, then I'm happy to stay on the tracker.
Cornwall insight is predicting rates of 33p/8.6p respectively in Q4 this year which baffles me as we are paying half that amount on the tracker? But this will be the price cap/ofgem rate and not market forces rate I'm guessing?

Tracker is based on the day-ahead rates, the Ofgem cap has to use the predicted future prices which the suppliers will have to pay to hedge their predicted demand.

Scot_39

The likes of Octopus tracker and Agile are easy to win on in a downmarket.  They might even work well in a stable market.

But when energy prices were rising they expose users to instant and spike increases. In the USA, such wholesale trackers have been around for years.

In Texas during a polar vortex - and in places physical grid collapse - people who maintained supply on wholesale linked deals -  ended up paying domestic rates relative to state wholesale cap - $9000/MWh iirc.  Its  been reviewed down since - but still $5000 in the immediate eftermath review.

Not for a few 1/2 hr slots, but for over a week of sub zero days and nights. Some paying in days, more than expected annual bill as a result.

The retail cap = £1 cf epg 34p on Octopus agile iirc, tracker ?

So yes review, consider, but beware of the risks too.

Alnat1

Not a huge risk though, you can contact Octopus and get moved to a different tariff immediately. 

Scot_39

Thanks @Alnat1

Good they are easy to switch.

superpang

Are all Ovo customers supposed to get this offer? Because I haven't. Perhaps it's dual fuel only?

I have electric heating so this could be worthwhile for me, even if I have to pay an exit fee in 3 months.

That said, I was going to transfer to Octopus at the start of next month as I'm sick of Ovo's poor customer service.