Fix till 27 or 28 with Iran War

reeceg353

couldn’t see this specific question in the forum so I wanted to ask it, see what everyone thought

My current fix (and possibly most people’s) is up in April 27 after fixing onto the new lower tariffs this month… however, there is an option to fix until 28

Electricity
27 is £100 a month
28 is £110 a month

Gas

Ironically British Gas is down at the moment and not offering Tariff page (“unavailable”)

question is, I suspect this war and the strait of Hormuz will be going on for at least a year… is it worth fixing to 28 now seeing as the gas prices will probably be skyrocketing by 27 when it comes to renewal? (It’s £10 a month more now but surely that’s going to pay itself back in the second 12 months)?

Exodi

reeceg353

My current fix (and possibly most people’s) is up in April 27 after fixing onto the new lower tariffs this month…

AIUI removing the ECO requirement from bills in April, meant all peoples bills went down in April, not just those taking out new tariffs. That is to say, most people were likely sticking with their current, likely cheaper, tariffs.

To be fair, I do feel this was poorly communicated by energy companies - who were often comparing pre-April current unit rates to post-April switch tariff rates, misleading some consumers into concluding the new tariffs were cheaper than their current one.

reeceg353

question is, I suspect this war and the strait of Hormuz will be going on for at least a year… is it worth fixing to 28 now seeing as the gas prices will probably be skyrocketing by 27 when it comes to renewal? (It’s £10 a month more now but surely that’s going to pay itself back in the second 12 months)?

Unfortunately I don't think anyone can give a definite answer on that without a crystal ball.

If your goal is to save money, I probably wouldn't be with BG to begin with.

TroubledTarts

If it helps, with no reasoning behind it just best guess we fixed our mortgage this month for 2 years to give us options.

That said energy markets rebound quicker than interest rates so personally a one year fix for energy would be what we would chose if we didn't love Agile.

always_learning22

I get the thinking, especially with all the uncertainty around energy prices. Personally, I’d see the extra £10 a month as a bit of an insurance premium. If prices do rise by 2027, fixing to 2028 could pay off, but it really comes down to how much risk you’re comfortable taking.

I’d also factor in flexibility. If the longer fix has exit fees or if prices stabilise or drop, you might end up overpaying.

For me, I’d only lock in to 2028 if the rate still feels reasonable today and I want that certainty. Otherwise I’d stick with 2027 and reassess closer to the time. Curious what others are doing in the same position.

Scot_39

Can you get the long term fix without exit penalties.

protected if prices rise or stay high, free to swap if return to pre Iran levels if not.

Some not many suppliers at least used to allow internal switches for free even if terms include exit fees shown on comparison sites - but there only applied if leaving to other suppliers.

reeceg353

https://forums.moneysavingexpert.com/discussion/comment/81963740#Comment_81963740

yeah British Gas offer this, the exit fee is £50 for 1 year fix and the 2 year fix is just £25

Scot_39

compared to post Ukraine £50 and £25 - per fuel i assume - is low- as exit fees peaked iirc nearer £150 per fuel on some deals 3-4 years ago.

in the context of say a predicted c£2000 cap come July - a rise of £300-400 - neither seems a steep exit fee to risk.

The £25 diffeence even covers a couple of months of tge quoted £10 extra.

like Ukraine its unlikely prices will quickly return if at all to pre Iran normality (they havent) - production facilities have been damaged - and firms and countries have weeks if not months to come - of income losses to make up.

The West doesnt buy a lot of Iranian oil or arguably more important to energy bills Iranian LNG. A radical shift on sanctions could change things though if part of peace deal. But that and LNG infrastructure would take time - years maybe - to build up.

bristolleedsfan

https://forums.moneysavingexpert.com/discussion/comment/81963750#Comment_81963750

I think you will find British Gas 1 year fix is £50 per fuel, 2 year fix £75 per fuel

"You won’t pay an exit fee if you switch to another British Gas fixed tariff"

Eon Next usually allow switching from fixed tariff to another internal tariff no exit fee.