Fixed energy tariffs and the price cap

Moopa_2

Hi, my current tariff expires a week after the planned announcement for the energy price cap changes. Normally I like to get ahead of these things and sort it a month in advance, however I'm wondering if the price cap is predicted to go down is it worth waiting until after the announcement to see if the fixed prices are lower?

Just wondering if anyone has any experience or insight into this?

QrizB

Fixed tariffs don't move in sync with the price cap. Suppliers can change their fixed price offers multiple times a month (Octopus for example has reached "version 6" of it's monthly fixed tariffs on occasion).

I wouldn't expect Ofgem's cap announcement to have any direct influence on the fixed price tariff offers.

la531983

https://forums.moneysavingexpert.com/discussion/comment/81861450#Comment_81861450

And in any case its very easy for them to estimate it and price it into their fixed offerings months in advance.

Netexporter

https://forums.moneysavingexpert.com/discussion/6652878/fixed-energy-tariffs-and-the-price-cap

The price cap is based on the wholesale prices of the quarter just passed. Fixed deals are based on future pricing of energy that the supplier has already contracted to purchase.

Scot_39

Not a normal decision right now I suspect - given budget.

So even less just a question of wholesale given wholesale costs are a fraction of the total and the magnitude of the policy / net zero cost changes this April.

If as I suspect OPs question I suspect specifically about the budget 75% of RO costs and Eco scheme c£150 to be moved to general taxation from Apr.

Likely However to be offset by loads of other uplifts like £24 in Jan and normal Apr inflation indexing of other non wholesale costs. Or if looking at a year old fix - the even higher escalation in Oct cap for non wholesale costs.

IOWJJBTM2025

I am guessing (could be wrong) that the OP question is more around the government saving of £150. If you fix now the saving has been confirmed to be applied post April' 26. If you wait until after April' 26 the fix rate may include the government reduction. There is a perception that the reduction may not be passed on in full, MSE have commented concern about transparency? I think that there are a lot of people including MSE checking to make sure the saving is passed on for everybody and the energy suppliers do not water down the savings into their costs/profits.

To answer your question of should you move now or wait until your fix ends?

Can you leave your current tariff early without having to pay early exit fees – am guessing that you still have 10 weeks until your contract ends?

Is your current fix better than the cheapest fix available today?

I don’t know if anyone can predict what will happen to the cheapest fix rates over the next 10 weeks. If you wait until your current fix ends the cheapest fix may be lower or more than it is today? There are numerous things that can happen in the world that could impact energy costs.

molerat

Interestingly fix rates are heading in one direction at the moment and that is upwards. Looking at my daughter's account and last week the cheapest fix was £201 pm, today it is £214 pm.

wakeupalarm

Maybe the energy companies plan to increase fix rate tariffs by £150 before April and then pass on the Government £150 discount after April.

Ildhund

@molerat wrote:

… fix rates are heading in one direction at the moment and that is upwards

Nine months ago, I fixed for 15 months to avoid increases in the SC (primarily the one caused by the extra cost of WHD), which weigh heavily in my low-usage bills. My supplier (OVO) helpfully post a list of all available tariffs, so it's (relatively) easy to compare them. I see that on 22 January, all of their fixed-rate plans were updated again: the SC on one-year fixes is about 18% higher today, while on the 15-month and two-year ones they're over 41% higher. This situation should change from 1 April when the alleged £150 reduction is supposed to take place. It's a real headache for suppliers to work out, because the costs they incur for government schemes are (or soon will be) levied per kWh, but most of them are recouped through the SC - i.e. per household. Balancing this wrongly could be very expensive for them.