Octopus to launch tracker energy tariff

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On the Octopus Tracker tariff - which is currently operating a "waiting list for invitations" - customers will be given a daily price for their energy, which is set in accordance with independently published wholesale prices.

By setting prices in this way, Octopus estimate that customers would be paying £907 a year for gas and electricity (as of wholesale prices published on May 5th), £231 less than they would with a Big Six standard variable tariff.

However, while bills will decrease in sync with drops in the wholesale market price, there will always remain the risk that they also increase when this price goes up.

Transparency

That risk aside, Octopus are confident that their new Tracker tariff will work out cheaper for their customers on the whole, if only because it will make impossible one of the things the Big Six providers are often accused of doing: keeping prices high even when wholesale costs fall.

As the founder and CEO of Octopus, Greg Jackson, says, "This tariff is the first guarantee that you won't get ripped off".

It works by calculating a new price everyday, which customers will be able to see via the tariff's app, and which will become more accurate as Octopus roll out smart meters to their customers.

Customers will also be able to see how their bills break down and how much Octopus receive in terms of profit, something which Octopus state will sit at around the 10% mark, compared to the 30% mark for other suppliers.

They believe that this will make their tariff the most transparent on the market, providing an antidote to other suppliers who reportedly use "bait and switch" tactics to lure new customers with lower deals that then become more expensive after the initial introductory period.

Flexibility and security

And in addition to providing a tariff that promises lower bills at a time when other suppliers have been raising their SVTs, Octopus also confirm that customers are able to come off the Tracker tariff at any point

They can switch to another Octopus tariff within a single day, while moves to another supplier take the usual period of time.

All of which will combine to ensure that customers benefit from considerable flexibility and security, just in case those pesky energy prices do go through periods of volatility in the coming months and years.