When is the right time to fix your energy deal?
Back in September 2021, I did a blog post where I posed the question is now the right time to fix a new energy tariff? Hindsight is a wonderful thing but I think I should have shouted the answer louder!! I told friends and family to fix their energy deal. The issue was that most of the fixed energy deals available, including the Octopus 24 months fixed energy tariff, were higher than the flexible deals available. Why pay more when you don’t need to lock yourself in may have been their mindset?
It’s now sadly really clear that the Octopus 24 months fixed deal would have been a great choice. It was £21.37 a month more than the Octopus Flexible tariff BUT now the price difference is vast! I’m talking hundreds if not thousands more a year! Luckily my mum took the deal but quite a few friends didn’t and I have just discovered my brothers on the Octopus flexible tariff too. 😣 For now, they are all stuck on the energy price cap.
Being stuck on the energy price cap is the best of a bad deal. Your energy price can’t keep going up. It’s still going to mean you are paying a lot more than last winter for your energy. Sadly you won’t find a cheaper energy deal anywhere else 😟😩. Unless you opt for a smart tariff. If you are in this position I would suggest you plan if and when to fix a new energy deal. For now, however, you are covered by the energy price cap.
Is now a good time to fix an Octopus Energy tariff?
No, now isn’t a good time to fix a new Octopus Energy tariff unless as I mentioned earlier you are opting for one of the Octopus smart tariffs. You’d probably pick a smart tariff now if you have solar panels, battery storage, a heat pump, or an electric car.
Wholesale energy prices have risen dramatically since September and energy firms like Octopus have to pass on the difference so that they stay in business. What you need to do is keep an eye out for a drop in wholesale energy prices. When wholesale energy prices go down energy firms can reduce the price of their fixed tariff by buying energy to meet the demand of new customers at that given price. This is called hedging.
Are wholesale energy prices still going up?
No, thankfully wholesale energy prices have started to come down. The price of an Octopus 12 month fixed tariff went down by around 15% on the 4th November. 👏 This followed a drop in wholesale energy prices in mid-October BUT sadly this is still considerably higher than the current energy price cap. So you would still be better off sticking with the standard variable tariff, known by Octopus as the Flexible tariff. (New customers can’t sign up for the Octopus Flexible tariff. if you are with another supplier just wait a little longer). The energy price cap is roughly set at 21p per kWh for electricity and 4p per kWh for gas.
|Compare Octopus 12 months fixed tariff energy prices. 👀||Electricity unit rate per kWh.||Gas unit rate per kWh.|
|09/08/22||70.76p per kWh🔺||19.77p🔺 per kWh|
|16/07/22||60.55p per kWh🔺||18.11p per kWh🔺|
|09/07/22||46.9p per kWh🔻||15.59p perkWh🔻|
|08/07/22||54.46p per kWh🔺||17.93p per kWh🔺|
|21/04/22||41.08p per kWh 🔺||11.82 per kWh🔻|
|Daily standing charge (from 25/03/22)||47.88p per day🔺||27.22p per day🔺|
|Daily standing charge (up to 24/03/22)||24.86p per day||26.10p per day.|
What we really need to see is the blue and green lines on this graph dropping even further. It is at this point that a fixed deal should be worth grabbing with both hands. Ideally, prices need to drop further before April 2022 when the energy price cap is reviewed. It won’t change the increase in the April Energy price cap but it will mean that a fixed deal will become more attractive than staying on the standard variable rate!
The Energy price cap in April 2022 is going to go up.
The April Energy price cap will be based on wholesale energy prices between August and December 2021. The drop in wholesale energy prices in mid-October may help but that sharp peak in prices from September means that the price cap will go up. As customers, this means that if you are on the Octopus Flexible tariff (standard variable tariff) your bills will go up again on the 1st April 2022.
The good news is that it’s closer to the summer. We can all reduce our consumption by turning off the heating and switching off lights as the days become longer BUT if there is a new fixed deal you can lock into I would suggest you are ready to take advantage of it as prices drop.
Octopus Energy fixed tariffs that don’t lock you in.
When you switch to an Octopus fixed deal they guarantee your energy price for a set period of time. The price won’t go up or down. You can switch to another deal or leave at any time with NO penalties! So if you fix your energy deal and prices continue to drop you can simply switch that new fixed rate with a quick email to [email protected]. If prices rise again you are safe and your energy bill won’t go up. It’s a win, win!
New year new deal!
I keep my website up to date so if you want to check back please do. I will be screaming FIX at the right time. If a deal looks like it could beat the price cap or offer a good safety net to an unpredictable winter in 2022 I will start tapping away on my keyboard.
Octopus Energy supply 100% green energy which will help you look after both the planet and your pocket! 🌍
Octopus is on a mission to make the world’s power 100% green, as quickly as possible.
You’ll get fairly-priced green tariffs, while they help build a smart, sustainable, low-carbon energy system for tomorrow.
Make 2022 the year you switch to green energy!