Should you fix your Octopus Energy Tariff for 2024?
Updated 16th May 2024
You can now take an Octopus Energy 12-month fixed tariff and swap it at any time with no penalties. It’s roughly 5.5% below the April 2024 Energy Price Cap.
If you are a new or existing Octopus Customer and you are thinking of switching suppliers it is a good time to review your tariff and make a plan for 2024.
Written by Sarah Chambers
Octopus 12 Months Fixed Tariff is approximately 5.5% lower than the April Energy Price Cap.
There is currently only one traditional Octopus 12 Months Fixed tariff this is open to both new and existing customers. This is the Octopus 12-month fixed May v 2 tariff and it’s worth considering if you prefer the assurance of a fixed energy deal.
I have changed my tune slightly over the last month. I was saying hold out slightly longer for a cheaper Octopus fixed but wholesale energy prices have started to rise, only slightly but enough to make taking an Octopus fixed deal quite a sensible option if you prefer a fixed rate and you aren’t interested in a smart tariff.
There were two Octopus fixed tariffs but Octopus has scrapped the Octopus Loyal 12 months fixed tariff which rewarded customers who had been with Octopus for eight months with a rate that was 4% below the April Energy Price Cap. Now anyone can opt for the Octopus 12-month fixed May v2 tariff which is roughly 5.5% below the April Energy Price Cap.
There are still no exit fees on the Octopus 12-month fixed rate tariff so if prices suddenly drop you can just swap to the cheaper Octopus fixed deal but 5.5% below the current price cap is worth seriously considering before Octopus changes its mind and withdraws or changes the rate.
As a new customer, you can switch to the Octopus 12 Months Fixed Tariff when you switch from your current supplier. The Octopus 12-month fixed is 5.5% lower than the April 2024 Energy Price Cap and there’s a 4% discount on the daily standing charge set by Ofgem.
Octopus 12 Months Fixed Tariff.
If you are thinking of switching to Octopus Energy you can now switch to either the Octopus Flexible tariff or Octopus 12 Months Fixed Tariff at the time of switching.
The 12-month fixed is roughly 5.5% cheaper than the current Energy Price Cap, it may be the same as the July price drop we will have to wait and see on the 25th of May when Ofgem make their announcement.
Even if you end up paying slightly more per unit of energy in the summer you’ll use less energy during this period too. The Octopus 12-month fixed could work out cheaper than the Energy Price Cap rates come winter and that’s more important in my book!
New customers can switch to the Octopus 12 months fixed or the Octopus Flexible tariff at the time of switching. You could grab the Octopus 12 months fixed and if prices drop further in the autumn switch to the Octopus Flexible rate or a cheaper fixed if it becomes available.
On the Octopus 12 Months Fixed Tariff May v 2 2024 you will pay;
- Electricity – 23.59p per kWh with a standing charge of 61.19p per day
- Gas – 5.65p per kWh with a standing charge of 29.68p per day.
This quote is for South Wales, and prices vary slightly throughout the UK.
Read my blog post – Compare Octopus Energy Tariffs 2024
About the author: I’ve been a happy Octopus Energy customer for 6 years.
This is me. I can be found on social media as Sarah_Go_Green and I have been an Octopus customer for 6 years. I’m featured on the Octopus website and their YouTube channel as a solar customer. I’ve been on the BBC news, published in the Telegraph for owning part of a wind turbine.
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What has happened to the Octopus Loyal 12-Months Fixed Tariff?
The Loyal Octopus 12-month fixed tariff was 4% below the April Energy Price Cap and was open to Octopus customers who had been with them for at least 8 months. It rewarded loyal Octopus customers with a cheaper energy rate. This was withdrawn and now everyone can get an Octopus 12-month fixed tariff which is approximately 5.5% below the Energy Price Cap for a dual-fuel customer.
Octopus 12 Months Fixed Tariffs v Octopus Flexible Tariff. What’s the difference?
The Energy Price Cap is the default tariff in the UK. It is referred to as the Standard Variable Rate and acts like a 3-month fixed tariff which changes on the 1st of January, 1st of April, 1st of July and 1st of September. When you are an Octopus Energy customer this is called the Octopus Flexible tariff.
The Octopus 12-month fixed tariff is fixed at the time of switching tariffs. Your costs per unit for your energy won’t change for 12 months and your standing charge is locked in too. Your tariff will remain the same for 12 months. There are no exit fees.
If you are an existing Octopus Energy customer you can check the name and rates of your current tariff on the home page of your Octopus Energy dashboard or check on the Octopus tariffs page. Just enter your postcode but do not select “Get a quote”. I would suggest clicking in the filter box to just see domestic tariffs.
If you are with another supplier how do you know if you are on the Energy Price Cap?
As a rough rule of thumb you will be on a default tariff if which follows the Energy Price Cap if;
- You have never switched your energy tariff.
- Your fixed deal has ended but you haven’t chosen a new tariff.
- Your last supplier went bust and you’ve been transferred to a new one
If you are still unsure check your bill or contact your current supplier to ask.
1st April 2024 to 30th June 2024 Energy Price Cap.
The Energy Price Cap fell by 12% on the 1st of April 2024. This reduction is reflected in the Octopus 12-month fixed tariff plus the daily standing charge is slightly less.
The chart below shows the current Energy Price Cap rates v both Octopus 12-month Fixed tariffs
Predictions are that the Energy Price Cap will fall by 8% on 1st July 2024 but that could change over the next few weeks. If you want to look ahead to October or January 2025 it is more a guess the further ahead you look.
As an illustration here are the current rates for the Octopus 12 months fixed tariffs, the Octopus Flexible tariff and predicted prices changed in 2024. The figures used below are from Cornwall Insight, Ofgem and the Octopus Energy website.
| Octopus Energy Tariff. | Time Period | Electricty price per kWh. | Gas price price per kWh |
|---|---|---|---|
| Octopus 12 months fixed May v2 South Wales | 11th May - Now. | 23.59p | 5.65p |
| Loyal Octopus 12 months fixed - South Wales | Now | N/A | N/A |
| Octopus Flexible Tariff. South Wales | 1st April - 30th June 2024 | 24.51p | 6.25p |
| Octopus Flexible Tariff - best guess National Average. | 1st July - 30th September 2024 | 22.43p | 5.38p |
| Octopus Flexible Tariff - best guess National Average | 1st September - 31st December 2024 | 23.81p | 5.61p |
| Octopus Flexible Tariff - best guess National Average. | 1st January to 31st March 2025 | 24.06p | 5.65p |
Should you take an Octopus Fixed Tariff now?
Octopus Energy has revised its fixed price and introduced the Octopus 12-month fixed May v2. This Octopus 12-month fixed tariff is open to anyone and is around 5.5% below the April Energy Price Cap.
The fact that the Octopus 12-month fixed dropped in price is a good sign for competition returning to the domestic energy market. Wholesale prices have started to creep up but Octopus has chosen to reduce its fixed rate so that it is competitive with the upcoming July Energy Price Cap which will be announced on the 24th May 2024.
Martin Lewis’ fixed rates on the Money Saving Expert website show other suppliers who offer competitive fixed rates too but to qualify for some of those you’ll need to sign up for a smart meter and be locked in with a £5o exit fee.
Martin Lewis has updated his website to show the Octopus fixed tariff his figures say it is 6% less than the Energy Price Cap but I seem to work it out at 5.5%. The May v1 of the Octopus fixed was 6% below the EPC but the update to version 2 increased the cost of electricty making it 5.5% I believe.
My suggestion is to consider the Octopus 12 months fixed now. You can always swap tariffs if prices go down. You can’t grab the cheaper rates if prices go up.
Is Octopus Energy 12 months fixed the cheapest fixed on the market with no exit fees and no restrictions?
Yes, if you compare Martin Lewis’ top fixed energy tariffs available the Octopus 12 months fixed is the best fixed rate on the market as it has no restrictions or exit fees.
- Ecotricity – 9% less than the April Energy Price Cap. Open to new and existing customers with a £50 exit fee. You’ll need a smart meter to qualify for this tariff.
- Outfox the market – 8% less than the April 2024 Energy Price Cap. Open to new and existing customers. You must manage your account online. Available as a dual fuel tariff only.
- EDF Energy – 6% less than the April 2024 Energy Price Cap. Open to new and existing customers with a £50 exit fee. You’ll need a smart meter to qualify for this tariff.
- Octopus Energy – 5.5% less than the April 2024 Energy Price Cap. Open to new and existing customers with no exit fees.🏆
- British Gas – 5% less than the April 2024 Energy Price Cap. Open to new and existing customers with a £100 exit fee.
- E.on Next – 5% less than the April 2024 Energy Price Cap. Open to new and existing customers with a £100 exit fee.
Points to consider when fixing your Octopus Energy tariff.
- The Octopus 12-month fixed rate is roughly 5.5% below the April Energy Price Cap and is available now. (Martin Lewis lists it as 6% below.)
- The Energy Price Cap is predicted to drop by 8% on the 1st of July.
- If you did nothing and stayed on the Octopus Flexible tariff you’d pay 5.5% more now until the 1st of July and then you’d probably save 8% from the 1st of July to the 1st of September. That’s only 2.5% more than you could get today!
- The Energy Price Cap is predicted to rise by 5% on the 1st of September. If you fixed your Octopus tariff now your price wouldn’t go up.
- If you prefer the stability of a fixed rate it might be a good idea to take the Octopus fixed rate now. The conflict in the Middle East is causing wholesale energy prices to start to creep up.
- Because the Energy Price Cap is going down in July it does not mean fixed rates will drop any further! One is based on the previous 3 months of wholesale energy prices and the other is based on energy prices now.
- There are exit fees.
Predictions have changed and the goalposts are forever moving.
On the 28th of March 2024, Cornwall Insight changed its predictions for Energy price caps for 2024/22025. The price drop in July is now 5 % less than previously predicted and the price rises in October 2024 are higher. I think this will change again and the drop will be less.
Since making its prediction at the end of March wholesale energy prices have been creeping up. Cornwall Insight uses data at the time of its prediction and I would say that has now changed. The wholesale energy market is no longer going down. There has been a slight upturn in prices.
I think the autumn and winter rates are the ones that need to be looked at as you use less energy in the summer months. On the Octopus 12 months fixed as an example, you would pay less for your electricty in January 2025 compared to the Energy Price Cap. These are, however, only predictions on the Energy Price Cap and they were made over a month ago before wholesale energy prices started to go up slightly again.
How to find the rates of the Octopus Loyal 12 months Tariff?
If you are an existing Octopus Energy customer you can see the rates of the Octopus Loyal 12 months fixed tariff on your Octopus dashboard. If your switch is not yet complete you can find these rates here. Enter your postcode but do not click to “get a quote”.
For now, the Loyal 12-month fixed has vanished but I prefer a cheaper fixed rate for everyone.
How to find the rates of the Octopus 12-month fixed Tariff?
If you are a new customer you can now switch to the Octopus 12 Months Fixed Tariff when you switch to Octopus Energy. New customers are now given the option of the Octopus Flexible Tariff or the Octopus 12-Month Fixed Tariff. You can get a quote online. This is where you will see the rates for your area.
Should you fix or stick with the Octopus Flexible tariff?
I think taking the Octopus Energy fixed rate now wouldn’t be a bad bet if your preference is a fixed rate. Fixed energy deals are based on current wholesale energy prices and the latest Octopus Fixed tariff has been available for a couple of weeks. Its rates are lower than the April Energy Price Cap and there’s not much of a difference come July, you’ll also use far less energy in that period too. The time you need to focus on is the winter when you can’t avoid having the heating and light on.
At the moment wholesale energy prices are creeping up again. When the Energy Price Cap goes down in July this does not mean cheaper fixed deals will become available. The two are not linked. The Energy Price Cap is based on the previous 3 months of wholesale energy rates while the fixed rates offered by suppliers are based on the wholesale rate NOW.
If wholesale energy prices are rising it means that energy suppliers have to buy your energy when you fix your tariff at a higher rate too. So we may well see the Octopus 12-month fixed rate being offered in July being higher than it is now.
Predictions are just that. They can change depending on politics and conflicts.
Cornwall Insight reports are the figures Martin Lewis uses to provide his energy advice, but these are just predictions.
Gas and electricity according to Cornwall Insight will fall further in the summer of 2024 but not as much as previously predicted. They were predicted to fall by 13% in July but in March they lowered it to 8%. It could now be even less.
Ofgem is also looking at redistributing standing charges into the unit rate even further. If you took a fixed you’d miss part of this because your terms and rates would be fixed for 12 months. But who knows when Ofgem will action these changes?
You don’t have to fix both energy types. With Octopus you have the option to fix your gas tariff and have your electricity tariff as flexible. Alternatively, you could choose an Octopus smart tariff for one fuel type and a fixed one for the other.
Here is a comparison between the Octopus 12-Month Fixed tariff, Octopus Flexible Tariff and the Octopus Tracker Tariff.
Just remember the Octopus 12-month fixed rate that is available today may change at any time. If it goes down and you’ve already fixed you can swap to it but if you haven’t taken a fixed and it goes up you can’t get that cheaper rate.
| Octopus Flexible Tariff | Octopus 12 months Fixed Tariff | Tracker Tariff 16th May 2024 |
|
| Rates per kWh | Fixed until 30th June 24 | Fixed for 12 months | Rate changes daily |
| Electricity | 24.51p | 23.59p | 19.94p |
| Gas | 6.25p | 5.65p | 4.52p |
These are the rates for South Wales. You can find the regional rates for the Energy Price Cap for 1st April 2024 on the Octopus website.
If you have a smart tariff please also consider the Octopus tracker. It is a great deal but what’s the cheapest Octopus Energy Tariff in 2024?
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