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it’s the cheapest in the market
My concern is that if variable is cheaper than the 12m fixed they are offering (albeit at 2x current rate), it suggests they are expecting prices to go up not down? Or is variable capped by ofgem, so artificially low vs wholesale costs?
kkg337-
Exactly. OFGEM sets the max price that suppliers can charge for a variable tariff (sometimes called SVT). Currently this is £500-£700 below the level that a supplier would need to charge to break even, hence why a number of firms have gone under as they are unable (due to OFGEM) to pass the rising commodity cost into their customers.
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My concern is that if variable is cheaper than the 12m fixed they are offering (albeit at 2x current rate), it suggests they are expecting prices to go up not down? Or is variable capped by ofgem, so artificially low vs wholesale costs?
Roll the dice. it's an uncertain market at the moment. All bets are off.
Personally, if they are offering a Variable Tariff that is subject to UK Price Cap then take that.
It won't be any cheaper but the maximum you will be charged will be regulated by the Government. A fixed deal will have no regulation at all.
Variable tariffs have no minimum contract terms or exit fees.
C4r1s
Mr_Sworld
Your best bet now is to roll onto a variable tariff, it’s the cheapest in the market (average household cost at £1290?). Octopus won’t like it, and will try to do everything they can to dissuade you from taking it (along with every supplier at the moment), but they have to have it available. If you do nothing, when your fixed term comes to an end that’s what you’ll end up on (“rolled variable”) then wait till Feb/March and see what’s out there.
Next price cap announcement by ofgem will (currently) be Mid Feb for April start so that’s when we’ll see more tariffs in market.
@Mr_Sworld