Better to fix for 12 or 24 months?

Paolo_S

Hello everyone,

I recently did an energy tariff comparison via the tool on MSE. The result I got suggested that I should stay with my current provider, but switch to one of their fixed tariffs. There are 2 on offer, either fixing for 12 or 24 months. The difference in price is only £1/month.

My feeling is that fixing for 24 months would be better, considering the variable energy prices?

Would you be able to share your thoughts on this? I'd mainly like to know if there is a clear advantage in choosing one out of the two tariffs.

Thanks for your feedback!

WibbleBaaaaaa

I am with octopus tracker at 55p standing charge, as of July 1st they have not reduced their tariffs or sc, so i am now looking at fuse who are offering 44p standing charge and 22p unit rate for 18 months, which i think it is safe to say we won't see lekky drop anywhere near these prices in that time, i mean come October i expect to see either no movement or a rise in both, then once winter hits it will all go up again......but this July 1st cap drop has been quite a eye opener as most of the big ones just seem to be ingnoring it and staying where they are.

QrizB

As a general rule, long fixes are great for people who want stable energy prices. You pass up the chance to save money if prices fall, but also avoid the risk that they'll rise.

Is there an exit fee on either fix? If not, you could take the longer one now then change later if prices fall?

Paolo_S

Thanks for your comments so far.

Admittedly, the 24 month fix has higher exit costs, which is understandable.

As I've been on this provider's variable tariff for some years now, I've found that prices haven't moved down much, but there have mainly been slight increases. I still think that fixing now for 24 months is better, unless someone with good knowledge of the energy market could prove otherwise?

QrizB

Paolo_S said:

... I still think that fixing now for 24 months is better, unless someone with good knowledge of the energy market could prove otherwise?

If I could forecast the energy markets, I wouldn't be posting on MSE from my dining room table.

I'd be posting from the saloon of my private yacht, while enjoying panoramic views of my private island in the middle distance

spot1034

WibbleBaaaaaa said:

I am with octopus tracker at 55p standing charge, as of July 1st they have not reduced their tariffs or sc, so i am now looking at fuse who are offering 44p standing charge and 22p unit rate for 18 months, which i think it is safe to say we won't see lekky drop anywhere near these prices in that time, i mean come October i expect to see either no movement or a rise in both, then once winter hits it will all go up again......but this July 1st cap drop has been quite a eye opener as most of the big ones just seem to be ingnoring it and staying where they are.

Do you mean they haven't launched any cheaper fixes since the price cap changed? There is no reason why they should. New fixed deals will be largely determined by what prices can be secured in the present market, whereas the price cap reflects what was happening in the market in a three month period that ended several weeks before it comes into effect.

I haven't really paid much attention to the SVR coming down this week as I'm on a fix myself, but as far as I can see, my supplier has reduced its own prices in line with the cap. 

Bungle73

I've already fixed for 2 years with Outfox the Market back in the spring. It seemed like a good move, looking at the way prices appeared to be going. Foxy let you change fixes internally without having to pay an exit fee, so if a cheaper deal comes along I'll swap to that one - I've done it a couple of times already. Currently on the May v4 tariff.

WibbleBaaaaaa said:

I am with octopus tracker at 55p standing charge, as of July 1st they have not reduced their tariffs or sc, so i am now looking at fuse who are offering 44p standing charge and 22p unit rate for 18 months, which i think it is safe to say we won't see lekky drop anywhere near these prices in that time, i mean come October i expect to see either no movement or a rise in both, then once winter hits it will all go up again......but this July 1st cap drop has been quite a eye opener as most of the big ones just seem to be ingnoring it and staying where they are.

What? They're not allowed to ignore the price cap.........

QrizB

Bungle73 said:

WibbleBaaaaaa said:

I am with octopus tracker at 55p standing charge, as of July 1st they have not reduced their tariffs or sc, so i am now looking at fuse who are offering 44p standing charge and 22p unit rate for 18 months, which i think it is safe to say we won't see lekky drop anywhere near these prices in that time, i mean come October i expect to see either no movement or a rise in both, then once winter hits it will all go up again......but this July 1st cap drop has been quite a eye opener as most of the big ones just seem to be ingnoring it and staying where they are.

What? They're not allowed to ignore the price cap.........

The wibbly one fails to acknowledge that the price cap only applies to the SVT. All the other fixed, capped, smart etc. tariffs can be set at whatever level the supplier chooses.

My average electricity unit price for June was about 11p/kWh, gas about 5p/kWh. Both on uncapped, variable smart tariffs.

SickGroove

I'm thinking the same for OVO as my fix just finished, so I'm on the price cap now...

Want to remain with OVO but not sure whether to fix for 12 or 24 month or just stay on the price cap. 

Any guidance appreciated! 

born_again

SickGroove said:

I'm thinking the same for OVO as my fix just finished, so I'm on the price cap now...

Want to remain with OVO but not sure whether to fix for 12 or 24 month or just stay on the price cap. 

Any guidance appreciated! 

Rock, Paper, Scissors.

As per @QrizB if you had a £1 for every thread like this we could retire 😶‍🌫️🤷‍♀️👍

Paolo_S

Thanks again for all your comments.

I think that I'm going to go for the 2 year fixed deal. I'm also with Outfox Energy so it's good to hear that you can switch out of the fixed deal to a better deal if available.

I looked back over my bills for the past 6 years by checking the energy statements received in July each year, just to get an idea of how prices have fluctuated. Back in 2019 I was paying a DD of £98/month for gas & elec. In the following years the July statements were £82, £115, £276(!), £252, £185 and £220. I have a feeling that until low cost green energy becomes widely available, we won't be seeing the lower prices that were being paid before Russia closed itself off from the European energy market.