The price cap will rise again this October by £63, pushing the typical annual bill to £1,717. That is the third increase in 12 months. Against that backdrop, Octopus Energy has done something unusual: it has publicly offered Greater Manchester mayor Andy Burnham a fixed tariff of £189 a month, about £2,268 a year, for every household in his region.
As reported by City AM, the offer is a direct challenge to Burnham’s campaign for a publicly owned energy company for the city-region. Octopus wants him to drop the plan and instead promote switching to its fixed deal. The politics is sharp. But for homeowners, the real question is whether this tariff actually saves money, and how it fits with longer-term energy upgrades.
What £189 a month buys, and what it doesn’t
Octopus’s £189 monthly figure works out at £2,268 a year. That is about £550 more than the current price cap of £1,717. So how is this a saving? The catch is that the price cap is not a fixed ceiling on total bills, it caps unit rates and standing charges. A household using more than the typical 12,000 kWh of gas and 2,900 kWh of electricity will pay more. Octopus’s £189 assumes a specific usage profile, probably higher than average. The company says the tariff undercuts the cap for typical users by roughly £200 annually, once you account for the fixed monthly amount covering all usage.
For a 3-bed semi using 14,000 kWh of gas and 3,500 kWh of electricity, the saving narrows. For a 2-bed flat using 8,000 kWh of gas and 2,000 kWh of electricity, the deal may be less attractive. Octopus has not published the full tariff terms, the standing charge, the unit rates, the exit fees. Without those, homeowners cannot compare like for like. The Energy Saving Trust advises checking the annual cost projection on any fixed deal against your actual usage before switching.
Who qualifies, and who doesn’t
The offer is open only to Greater Manchester residents. That is about 2.8 million households. Octopus wants Burnham to promote it through the mayor’s office. But the deal is a standard fixed tariff, anyone in the region can already switch to it via comparison sites. What is new is the political packaging.
Homeowners outside Greater Manchester can still find fixed deals below the price cap. Ofgem data shows that as of September 2024, around 15 fixed tariffs were available nationally, with typical savings of £150–£250 compared with the cap. But the market moves fast. Suppliers pull deals when wholesale prices shift. The best advice is to check comparison sites weekly and be ready to switch within 24 hours of a good offer appearing.
What this misses, the structural fix
Octopus’s £189 tariff is a short-term fix. It does nothing to reduce the amount of energy a home uses. The real lever for bill reduction is fabric efficiency: loft insulation to 270 mm, cavity wall fill, double or triple glazing, draught-proofing, and an A-rated boiler or heat pump. The Energy Saving Trust estimates that a typical semi-detached home can save £300–£500 a year on heating costs through insulation alone.
But… the upfront cost is the barrier. Loft insulation costs £300–£600 professionally. Cavity wall fill is £500–£1,500. A heat pump runs £7,000–£13,000 after the Boiler Upgrade Scheme grant of £7,500. Octopus’s tariff saves you maybe £200 a year now. Insulation saves you that every year for decades, and it lifts your EPC rating from D to C or B, which adds value when you sell.
What to do next
If you live in Greater Manchester, check the Octopus £189 tariff terms on its website. Compare the annual cost projection against your actual usage from your last 12 bills. If the saving is £150 or more, switch. If not, look at other fixed deals.
For everyone else: fix your tariff now if you can get £150 below the cap, then spend the next six months getting an EPC assessment and quotes for insulation. The Great British Insulation Scheme offers free or subsidised cavity wall and loft insulation for low-income households. Applications are open through gov.uk. Do not wait for a political stunt to save you money, the structural fix is in your loft and your walls.
Frequently Asked Questions
For a typical household using 12,000 kWh of gas and 2,900 kWh of electricity, Octopus claims the tariff undercuts the cap by roughly £200 a year. But the saving depends on your actual usage, check the annual cost projection before switching.
Yes. Ofgem data shows around 15 fixed tariffs were available nationally as of September 2024, with typical savings of £150–£250 versus the price cap. Use comparison sites and be ready to switch quickly.
