How much are energy costs going to increase?

Reported

I'm on octopus agile and pay wholesale prices, it's not ideal for families but for people who can, shift their usage out of high use times it's very cheap.
I currently pay £60pm but my average bill over winter was around £40pm, that extra £20 will see me through this blip.
Prices have skyrocketed but when I do the bulk of stuff, cooking, washing, dishwasher.. It's still cheaper than any other tariff.
Yesterday was bad but the highest price per kw I paid was 27p,still a lot cheaper than most tariffs.

I'm not rushing into a fixed tarrif because in the long run it will cost me more.

We were coming to the end of our fixed so Dh swapped to a new fixed yesterday.

Another thing to factor in is how vulnerable small supply-only companies will be to market shocks.

Remember than 60 small UK energy suppliers went bust between 2021 and 2025 due to surging wholesale prices, and affected over 6 million customers. The crisis peaked in late 2021, with 28 companies collapsing that year alone, including major providers like Bulb Energy. Most failures occurred between July 2021 and early 2022.

My company wanted me to fix based on my January/ February consumption. That way I'd be paying way over the odds each month as my consumption plummets over the spring, summer and autumn. I'm on standard variable and take a reading each month so I only pay for what's actually been used. As I pay by direct debit I always end up massively in credit over those months which EDF do not repay me. However, if I end up a tiny amount in debit over the winter months they whack my DD up enormously only to have to halve it later.

Martin Lewis advises fixing.
I am on a fix already, not finishing until July.
A fix a week ago would have been well worthwhile. The fixes are now changing ( increasing) daily. It is a very volatile situation.

How much it will change depends on whether it is a fixed or variable tariff and how long until the contract ends.

Mine is fixed but with a provision that if regulation charges eg CCL change it will be passed on. The company may have bought energy forward to cover that contract, or taken the risk of market prices, maybe some of each.

Variable tariffs can change at any time, when a contract changes you just have to shop around for the best deal. Because of the current uncertainty it may be better to stay on standard variable until the conflict is settled or at least calms down.

It is thought likely that energy may cost around £500 more in July, which I why I don’t want to let my fix run until July, as a new fix in July is bound to be a lot dearer.

The new fix I have been offered today, although it starts today, will mean my first payment goes out on 4th April, so they have already factored in the April price drop. It will cost me only about £14 extra a year more than I am currently paying, but that is comparing the total year to July.
I am with Octopus and I think their customer service is excellent. I like the way I can adjust my monthly Direct Debit too, if I wish. I daresay I could find a cheaper fix elsewhere, but am reluctant to move.

It will cost on average £500 extra due to this war on our fuel That's apart from all the other things that will rise as a result. BBC news.

All fixes, whenever entered, into should come down on 1 April although the rate will vary. For smaller energy companies, the reduction will be less because they haven’t been charged the eco costs that bigger ones have.

Martin Lewis explains:

www.facebook.com/watch/?v=1228405302712066

Fixing now will protect you from the inevitable increases that will come due to the current conflict.

Current fixes are likely to be withdraw very soon due to that.

Exit fees are charged by many suppliers so you would have to take that into account anyway.

I also factor in how good customer service is. I have chopped and changed over the years and have been with some shockers for that so don’t mind paying slightly more for a better experience.

If the fixed rates on offer could save you a £100 over the year so cover any exit fees, I’d go for it - all other things taken into account.

Transcript of what Lewis says about switching fixes now:

If you're already on a fixed energy tariff, it will get cheaper on the 1st of April. There's a lot of confusion about this and lots of people saying to me, should I get a new fix? Well, I just want to talk you through it.

So, in a What will happen to my fix? nutshell, on the 1st of April, all bills are getting cheaper. So, if you're on a fix, whether you got that the day before the 1st of April, the month before, or six months before, the rate you pay for energy will drop on the 1st of April. How much will it drop and why? Now, typically the amount it will drop, it's the unit rate of electricity that will fall by about 3.5 p per kilowatt hour, which is typically about 13% of what you pay on the unit rate right now. And the unit rate of gas will drop by 0.33 kilowatt hour, which is about 6% roughly on average. That's for most firms, but if you're with a smaller firm, you'll get a reduction, but it won't be as big. And the reason for that is what's happening to policy costs.

The first one and the big one is a thing called the renewable obligation. 75% of the cost of that is being taken off energy bills and instead being paid for by the state. And this applies to all energy bills. And when I say the state, of course, that means through general taxation or through debts that you can get into the politics of that yourself. I'm just talking about energy bills. So that's the main reason for the reduction.

And then there's another thing which is the eco scheme that ends permanently in March. And that was paid for through bigger firms energy bills, which is why bigger firms will see a bigger reduction because that's ended. Smaller firms weren't paying for it anyway. So they'll only get the reduction from the renewables obligation.

The Why the confusion? reason ... there's been so much confusion about this is this fall happens at the same time that the price cap falls. Now the timing is deliberate, but the two things are separate. Lots of factors make up the energy price cap. The biggest reason it's falling in April is because of this reduction in policy costs. And it's the same reason we're seeing this unprecedented change in other bills is happening at the same time. But even though the same reason is driving them, they are actually two different things. The the price cap doesn't affect fixed rates. It's a policy cost that affects fixed rates.

So Should I fix now? lots of people saying to me with prices coming down, including fixes, should I be fixing right now? Well, this isn't a reason for you to get a new fix. I mean, if you get a new fix or your existing fix, they're both going to come down as long as it's a bigger firm by the same amount on the 1st of April. So, of course, you can go and do a comparison now.

And if you go and do a comparison and you find a new fix that is cheaper than your existing fix and do factor in any early exit penalties, then yes, you might want to move to it uh just cuz it's cheaper. Because if it's cheaper now, then when they both drop on the 1 of April, it will still be cheaper. But if it's more expensive now, when they both drop on the 1 of April, it will still be more expensive.

So, this isn't a driver for getting a new fix. This is just for you to know if you're on a fix. And frankly, all bills, those on time of use tariffs and those on EV tariffs, they should all be dropping on the 1st of April. Though with the time of use tariffs and the EV tariffs, exactly how much they'll drop is more complex because they don't work in the same way with the simple unit rate.

I fixed last week, just before the war broke, with a deal from Eon Next saving me only 50.00 per year. My original fix didn't end until June and I had thought of just waiting. I'm so pleased I didn't as this new deal has now been pulled.