- Many customers are worried about the increase in their electricity bills.
- They may have to pay more if they expire at a certain tariff.
- We check how much they can go up in the next few months
My gas and electricity are on a fixed-rate deal with Octopus until March 2022, but I’m worried that rising energy prices will drive up my bills after that.
My account says I am 12 months fixed tariff on Super Green Octopus and it lasts till 13th March 2022.
I am paying 2.91p/kWh and 26.06p per day for gas and 17.114/kWh and 24.49p per day for electricity, how does this compare to current prices and price range?
Also, what if the deal ends, am I likely to move on to the variable rate price at that point and suddenly my bills go up?
Energy crisis means many families are facing higher bills in the next few months
Grace Gosden, This is Money, Answer: With the energy crisis continuing, customers on fixed tariffs are breathing a sigh of relief due to rising bulk gas prices.
These customers won’t see a big increase in their bills as long as their contract lasts – most signed these deals when the cost of bulk gas was very low.
It’s worth pointing out here that if your supplier goes bad, the fixed rate won’t be respected and you’ll be moved to a new tariff with a new supplier via offgame – and currently, this means incurring costs. There could be a huge increase.
What is worrying is that once the fixed deal is over, the prices for the customers will go up as the fixed tariffs are now much more expensive than before.
It would depend on when a contract ends what a new fixed tariff might be.
For example, those whose fixed deals expire soon may find that new contracts are likely to be hundreds of pounds more expensive than their current plan.
However, for consumers whose deal expires next year, it is unknown what the wholesale situation will be like and, therefore, how expensive the new tariffs could be.
In your situation, when your tariff expires in March next year, it is not certain how expensive the offers will be.
This is a time when a crisis may be on its way to a resolution or, alternatively, a period when the problem is still ongoing.
How does my current fixed tariff compare to the best deals available?
In regards to how much you’re paying now on your fixed deal with Octopus Energy, compared to other offers, it’s hard to say.
This is because energy deals are constantly changing and will be different for every household, changing by pincode.
However, you can guarantee that your current costs are much cheaper than the current ‘best’ available tariffs as they have increased since the energy crisis began.
Octopus Energy warns prices will start to rise, but expects it to still deliver good value
new price range
Ofgem’s price range has increased due to an increase of £1,277 – £139 from an average of £1,138 for standard variable tariff customers on 1 October.
While many were shocked at the sharp increase at first, now, thanks to the cap, these are some of the best deals on the market.
This means, at present, switching to a default plan, which used to be the most invaluable option, may be the best solution to the current situation.
How does my current fixed tariff compare to the energy price range?
Currently, you are paying 17.114 per kWh and 24.49p per day for electricity and 2.91p per kWh and 26.06p per day for gas with Octopus.
The per unit level equivalent to the price limit for a specific customer paying by direct debit from October 1 will be 21p per kWh for electricity customers and 4p per kWh for gas customers.
This means you are currently paying less for both gas and electricity.
However, the price cap will remain fixed only until April next year – which means it’s likely to change all over again just a few weeks after your fixed plan expires.
If it increases, as expected, most, if not all, suppliers will cap the price and that could mean the price of your bills go up.
Alternatively, it may be the case that Level is still the best value option for consumers.
However, Octopus believes it can still offer you the best value deals.
There is concern that once a certain number of deals expire, prices will go up.
An Octopus Energy spokesperson responded: When Octopus customers’ fixed contracts expire, they are given the choice of whether to re-fix their prices, or do nothing and roll over to our flexible tariffs.
At the moment, suppliers are buying energy wholesale for more than 212 percent compared to a year ago, meaning customers who set their prices last year will see higher rates when it comes time to move to the new tariffs.
Customers can rest assured that our flexible tariffs, like all others in the industry, are limited to reasonable levels set by the government and offgame.
In fact, Octopus’ flexible tariff is one of the best prices on the market, averaging £51 below the price range for existing customers.
For as long as we’ve been in business, we’ve fought against a ‘tease and squeeze’ strategy in energy.
This means that we have always kept the gap between our variable tariff and our fixed tariff as small as possible.
We worked hard for energy price ranges to protect customers of all suppliers from rip-off deals, but instead of using the maximum price range as a guide, we’ve always tried to keep prices as low as we can. Can for our customers: Our variable tariffs have averaged £130 less than the cap since it was introduced.
In fact, customers who have stayed on our variable tariff for the five years since our launch will have saved an average of £892 compared to the average ‘Big Six’ variable tariff.
So, however, when it comes time to renew their tariffs, households may see a rise in their bills…