Are they joking?

I get my electricity and gas from SSE. I've been on their standard variable tariff since my last fixed deal ran out in December 2021, and of course like most other people I've had to accommodate rapidly rising domestic fuel charges. So far I've coped easily enough by simply cutting back on my regular monthly savings. It helps that I live alone - I can finely control my use of electricity and gas. I have smart meters installed. Although my home isn't insulated to the latest standard, it's a small bungalow with double glazing, and it's easy to keep warm. I don't have a lot of appliances anyway, nor do I use them as much as a family would have to. Recently I had a new gas boiler installed, which is distinctly more efficient than the very old one it replaced, and will save me a little money in heating costs. 

I have started to have fewer lights on in the evening, and for months now the central heating thermostat has been turned down by a degree or so. Undoubtedly these things help. I haven't yet had to resort to truly parsimonious measures - but that may come, of course! 

Presently I pay SSE £56 a month for my electricity, and £157 a month for my gas, on their standard variable rate. A total of £213 a month, which is £2,556 for a year. I have planned ahead to the end of 2023, and anticipate my domestic fuel charges rising in stages to £340 a month, or £4,080 a year. This is below the latest dire forecasts for families in family-sized houses, but then my needs are less, and certainly not typical. Besides, the governmental measures in the pipeline will clip a bit off my costs this coming winter; and I am currently in credit with SSE by £871, which will also blunt the impact of the October and January price increases. 

All this means that despite being on a fixed income, I should manage to keep going financially for some time yet. But my long-term savings plans are already in tatters, not helped by all the unexpected maintenance costs on car, caravan and house in the last few months. The latest news is that my twelve-year-old washing machine has packed in. I've bought a replacement, but that's yet another £500+ gone. The total sucked out of my savings accounts since November last year is around £11,000. With something to show for it, of course; but nevertheless I am that much more exposed. And I am sure this run of costs - one damn thing after another - isn't over yet. I'll be taking fewer holidays in 2023 for sure.

It's not quite 'I'm all right, Jack' but I count myself fortunate compared to families around the country, who are getting very squeezed indeed, and will be looking for big changes in the way electricity and gas prices are controlled. I think that is coming, and it will have to, but meanwhile the supply companies need to be extra-careful, extra-sensitive, where customer relations are concerned. 

Yesterday, after a long day out, I came home to find a letter for me from SSE. The heading? Say goodbye to energy price uncertainty with a fixed tariff. Was this SSE throwing its customers a lifeline? 

Not a bit of it. They made out a case for all the price rises so far, and those likely to come, and how the existing price capping arrangements will push the cap up to an annual payment limit of £3,244 this October. That's the equivalent of £270 a month - 65% more than its present level. With of course further increases piling on the pressure every three months thereafter. Scary!  

They then went on to extol the advantages of fixing the monthly cost. Their actual fixed deal offer? I looked it up on their website. I took a screenprint. Here it is.

So they are telling me that although my current direct debits total £213 a month, my average annual usage of electricity and gas, even at the present inflated prices, works out at only £179 a month. Which is why I've been accumulating a fat credit balance. And yet they are urging me to switch to a fixed deal under which my monthly fuel cost would be £390. The actual direct debits would be at least that, possibly more. And the deal lasts only one year - once it ends, I'd be bounced back to the standard variable tariff. 

I have no quarrel with their forecast usage figures of 1,580 kWh for electricity and 19,655 kWh for gas. I could quibble a bit - bearing in mind my forthcoming absence on a particularly long Scottish holiday, I may very well use less in the coming year than they think; but an especially cold winter might cancel that out.

Still, why would I agree to buy electricity and gas for £390 a month in the year ahead, when on the standard tariff the price to me will be a lot less, and almost certainly stay that way throughout 2023?

No thank you. 

But the decision might not be so easy for households with mortgage, childcare and commuting costs to consider. The psychological comfort of fixing at least one major bill, even for just a year, might make a deal like this more attractive.  

But I still think it's a very poor deal. And I can't believe its purpose is to help customers get through a difficult time. Rather, to persuade them to sign up for an even more expensive tariff, and thereby increase SSE's revenue, or at least maintain it if the new Regulator introduces tough new capping arrangements. I can't blame a trading company for seeking profit, but I don't think this is a well-judged and sincere attempt to ease the anxieties of their customers. 

But some will go for it. Not me though.