[Andy65]

If like me, your current fixed Tariff is coming to an end then make sure you get your old bills out and a calculator, be wary of the monthly costs being offered for the available Tariffs.

In my renewal options, eon-next have underestimated my annual usage. Based upon my average usage over the last 2 years, eon-next are forecasting my electricity to be 90 kWh less and 533 kWh less for gas.
Whilst that doesn't seem a lot, it makes a noticeable difference to the monthly costs shown for available Tariffs, and it makes the fixed Tariffs look more 'attractive' than they are.

I have 3 options:

NextFlex

Next Online V16

Next 1 Year 15

If I update these Tariffs to my average usage over the last 2 years, the NextFlex would be £5.30 per month more, the Next Online V16 is £8.09 more and the Next 1 Year 15 would be £11.36 per month more.

All of a sudden the 'cheapest' fixed deal becomes less attractive because it is nearly £3 a month more than the variable when using realistic usage figures. That's £3 per month more than eon-next are suggesting on my renewal.

Historically there was a tendency for suppliers to overestimate your usage, I can only assume now that by underestimating they are trying to make the fixed deals look cheaper than they actually are. There are no exit fees on the fixed Tariffs but presumably the majority of customers don't check and will just see out their fixed deal. They'll also wonder why their monthly cost increases during the fixed deal, not realising that their usage was probably underestimated.

The other thing to be aware of is if you're on E7. The Night Rate on NextFlex is 53% of the Day Rate, so just over half the cost.
If I went on to the Next Online V16, the Night Rate increases to 65% of the Day Rate and for the Next 1 Year 15 it increases to 73%.
So anyone who uses storage heaters and opts for the Next 1 Year 15 is going to get hammered.

It's a bit of a guessing game when it comes to opting for a variable or fixed Tariff at the moment, but don't rely on the monthly costs shown on your renewal notice - CHECK IT YOURSELF.

[DebF_EONNext]

That's some great advice there @Andy65. We base our quotes on customer usage and readings over the last 12 months however if there have had estimates or missed readings on the account this can have an effect on their quote which is why we highly recommend that customers ensure we have a monthly reading to ensure their account is as up to date and as accurate as possible, then when it comes to renewal it should be a more accurate estimated annual consumption.

I do agree with you @meldrewreborn it is important for our customers to do their research and decide what tariff is best for them. While our fixed tariffs may not be the cheapest customers have to weigh up if this is a better deal in the longer term compared to the variable which as you know can rise or fall based on the market and OFGEM price cap reviews. The good thing is we don't charge any exit fees so our customers are never tied in to a contract and are always free to switch tariffs if they find something that suits them better.

[meldrewreborn]

@Andy65

That's sensible advice. Customers need to work out the effect of the tariffs offered on their account by reference to their likely levels and patterns of usage.

However when it comes to making a decision on the results its still hit and miss because while for fixed prices the outcome is reasonably clear, the result for variable prices needs to factor in a price increase in October, and another in December 2022 or April 2023 (we don't know if the next price cap period is 3 or 6 months) and the problem is that we don't know the scale of the changes. At the last price cap change the Headline rate increase was 54%, but that masked numerous differences. On Gas, the standing charge was little changed while unit prices went up circa 80+%. On Electricity the standing charge was up around 70% and unit charges about 40%. I'm using loose terms because the rates are regional, and vary by payment method so using lose terms gives the flavour rather than precise data.

This time I'm thinking standing charges might remain much the same while gas unit prices will be up again quite sharply while electricity unit prices will be hiked again but less than for gas.

OFGEM have been stung by criticism of loading the costs of bailing out failed suppliers solely onto the electricity standing charge, which penalises small users relative to large users. So they might seek to address that - if they do then the electricity standing charge might come down and unit prices increase a bit more.

So in considering whether to fix or not we still don't have all the necessary data to make an informed decision, But you can well imagine that suppliers have access to experts who will have computed the fixed prices to make sure that they are profitable to the supplier.

[meldrewreborn]

@Andy65

Cornwall insight , an energy consultancy have given their assessment of how the new price cap figures will come out, based on prices in the wholesale market over the relevant period.

Assuming standing charges remain unchanged (they probably will not, but that's the assumption I have made) we're going to be looking at unit prices of electricity of circa 50p, and 16p for gas, inclusive of VAT.

33p and 8p are rough approximations of the prices under the current price cap , so the increases are likely to be considered unaffordable by many.

But at least there's something to use in comparisons against any fix price offers that are out there.

I wish it could be better news. OFGEM may make some tweaks to the system and Government may intervene, but these prices will shock many.

[Andy65]

@meldrewreborn

Thanks for the update, I did read something about it yesterday although no figures were mentioned.

As the Government has allocated £400 per household based upon current prices I can't image that there would no additional funding if OFGEM allow those increases.

[meldrewreborn]

@Andy65

OFGEM are bound by the terms of the price cap to set the caps in a precise and rather formulaic manner, based on costs in a preceding 6 month period. That data is now nearly all in. In simple terms OFGEM will soon publish the new price caps and it will then be up to Government to respond.

My Gas is with EDF and I've just fixed with them at 13p per kWH for 2 years with a £150 exit fee. I've no data for the eon next offerings and switching wasn't a quick option. I suspect that any attractive (!) current fix offers will disappear quite soon, so anybody thinking of fixing might be best advised to snap up any attractive (everything is relative!) deals ASAP.