Dear Hugo App User,
Hopefully, it’s not just the HUGO app that can help you manage energy bills. Here is my advice on how to manage the NEW energy price cap.
I’d like to think I’m qualified to give this advice (2 time winner of ‘Energy Buyer of the Year’ in 2015 and 2017 at The Energy Awards) and this is what I’m going to do:
If you’re on a fixed deal stick with it, but these steps below will work when your deal is 30 days from expiring;
A big mistake is that people only switch when their deal has ended. DON’T DO THIS! Because you’ll spend up to 30 days on the new price cap, as it can take up to 30 days to switch;
So if you’re on the CURRENT price cap you should aim to switch in early March 2022;
The CURRENT price cap for gas is around 4p for gas and 21p for electricity;
The NEW price cap will go up to 7p for gas and 28p for electricity (an average household increase of £700 per annum in total vs the CURRENT cap)
Market rates are currently about 5p for gas and 24p for electricity, so lower than the NEW price cap but above the CURRENT cap;
Between now and March 2022 here are the likely scenarios:
1. UNLIKELY SCENARIO – £700 Increase (Annual)
In March 2022 if wholesale prices skyrocket above and beyond the NEW price cap, then sadly the best option will be to roll onto the NEW cap until things settle down. I know media speculation is rife about this scenario.
2. MAYBE SCENARIO (AND BEST CASE) – Saving of £100 or more vs CURRENT cap
Wholesale prices start to fall back down to normal levels and deals become apparent that are much better than even the CURRENT price cap. In this scenario any deal where gas is under 4p and electricity is under 20p is going to be a reasonable deal and I would sign up to this for at least 1 year. This is entirely possible because the past 10 years has shown that February is when wholesale prices start to come down (especially if the weather is milder).
3. LIKELY SCENARIO – £200-300 increase
The wholesale price stays where it is (maybe little higher or lower) then you’ll be offered deals for gas at around 5-6p and electricity around 21-23p. This is the trickiest scenario but if this presents itself I would still sign up for 1 year, so you stay under the NEW price cap but MOST IMPORTANTLY make sure you are able to pay exit fee of around £20 and switch supplier if the wholesale price drops, so you can refix at around 4p or less for gas and 20p or less for electricity.
Wait until March 2022 to see what tariffs are available;
In my emails I’m going to start providing wholesale price data so you can see which way the market is going;
4p or less and 20p or less for electricity look like reasonable deals going into 2022;
Don’t sign into deals higher the NEW price cap unit rates (unlikely scenario) and stay off auto switching sites that will do this to you;
If you have any questions about your tariff please email us : email@example.com
You can keep an eye on available tariffs in HUGO, these should start to appear in late Feb and early March.
Note: In the MAYBE and LIKELY scenarios you must look to SWITCH suppliers to keep costs down, if you do nothing you’ll be in scenario 1 which goes from UNLIKELY to SELF-IMPOSED.
We hope this helps. At HUGO we want to be more than a APP we want to be a community. So let’s navigate this current energy minefield together.
HUGO ENERGY APP
Contact Us : firstname.lastname@example.org