Tariff Conundrum

RelievedSheff

Our current tariff ends on 24th March 2027 but we have just reached the point where we can do an internal tariff switch with Outfox Energy without incurring exit fees.

Our current rates are:

Electric: SC 51.05p Unit Rate: 20.61p

Gas: SC 54.94p Unit Rate: 5.98p

Our conundrum now is do we ride out the winter on our current lower rates knowing that rates will be going up again in January and we will likely pay even more or do we switch to their cheapest deal they can offer us now which is an 18 month deal at:

Electric: SC 51.45p Unit Rate: 24.05p

Gas: SC 58.74p Unit Rate: 6.94p

For context we are estimated to use 7000kWh of electric and 12000kWh of gas in 12 months. We have not been in the house for 12 months yet but the figures don't look like they will be that far out. We do not have any solar, EV or house batteries.

la531983

Not sure why you would want to be paying a lot more for 5 months over winter when you dont really need to.

RelievedSheff

https://forums.moneysavingexpert.com/discussion/comment/82163227#Comment_82163227

Because it would mean taking a smaller hit on the unit rates now compared to a (admittedly potential but very likely) bigger hit on prices come March.

When we took this tariff out in March the rates didn't look great thanks to the outbreak of the Iran war, now the rates look great compared to what is on offer.

la531983

But nobody knows what the prices will be in March. All predicted rises to the cap are already priced in, in any case.

LukeB_92

It may help to put a figure on the extra you would pay by switching now, on the usage you have given:

Current rates for a year: electricity 7,000 kWh at 20.61p plus standing charge comes to about £1,629, and gas 12,000 kWh at 5.98p plus standing charge to about £918 - roughly £2,547 in total.

New rates for a year: electricity about £1,871 and gas about £1,047 - roughly £2,918 in total.

So switching now costs about £370 a year more, pro rata, for the remaining months to March - and because winter use is heavier than average, the extra over that period alone is likely to be well over £150. For the switch to pay off, the deal available in March would need to be more than about £370 a year worse than the one on offer now, and stay that way for a good part of the 18 months. That is the gamble, rather than whether prices rise at all.

RelievedSheff

Thanks all for your responses. It all became a bit arbitrary in the end because we missed the rates and the newest rates on offer are considerably higher at:

Electric: SC 51.45p Unit Rate: 26.70p

Gas: SC 58.74p Unit Rate: 7.31p

At those unit rates we have decided to stick it out on our existing tariff and hope for some better news come the end of March!

(Fingers crossed)

QrizB

At those unit rates we have decided to stick it out on our existing tariff and hope for some better news come the end of March!

I'm not expecting any better news but I'd definitely endorse the idea of sticking on your current fix until it ends.

You've got a cheap(ish) winter ahead of you. Next winter is going to be more expensive whatever you do. If you were to choose a 12m fix now, you'd definitely pay more this winter and the new fix would end in October 2027 so you'd still be paying next-winter prices next winter.

RelievedSheff

https://forums.moneysavingexpert.com/discussion/comment/82167587#Comment_82167587

Both of the alternative fixes we were offered were longer than 12 months. One was 18 months and the other 24 month, but it's a bit late now……………

I guess we will enjoy this cheaper winter and then suck up the difference next year.