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  • FIRST POST
    • withnailuk
    • By withnailuk 16th Dec 16, 11:26 PM
    • 25Posts
    • 58Thanks
    withnailuk
    What the hell does fixed rate really mean?
    • #1
    • 16th Dec 16, 11:26 PM
    What the hell does fixed rate really mean? 16th Dec 16 at 11:26 PM
    Eveining all, I decided after nearly ten years of pre-payment on my gas & electric to sign up to a two year FIXED RATE agrement with Npower . All was well , I was paying £77 for both , ( A good saving! ) untill I recieved a email from Npower stating that my bill had gone up to £92 a month. You can call me a halfwit but I was under the impression that fixed rate meant that my bill would not be affected by any price rise? Am I missing somthing here?
    Insanity: doing the same thing over and over again and expecting different results.
Page 1
    • Richie-from-the-Boro
    • By Richie-from-the-Boro 16th Dec 16, 11:41 PM
    • 6,308 Posts
    • 4,746 Thanks
    Richie-from-the-Boro
    • #2
    • 16th Dec 16, 11:41 PM
    • #2
    • 16th Dec 16, 11:41 PM
    Fixed rate means your unit rate stays the same for the duration of the plan (usually 12 months). Use more units - pay more my friend.
    Disclaimer : Everything I write on this forum is my opinion. I try to be an even-handed poster and accept that you at times may not agree with these opinions or how I choose to express them, this is not my problem. The Disabled : If years cannot be added to their lives, at least life can be added to their years - Alf Morris - ℜ
    • frugalmacdugal
    • By frugalmacdugal 17th Dec 16, 5:23 AM
    • 5,921 Posts
    • 5,121 Thanks
    frugalmacdugal
    • #3
    • 17th Dec 16, 5:23 AM
    • #3
    • 17th Dec 16, 5:23 AM
    Hi,

    right, halfwit, (you said I could call you that)

    As above, your fixed rate per unit stays the same, say 15p a unit, but your usage could vary.

    For months you use 100 units a month so £15 a month, then a cold frosty snap, so using more heating and using 200 units a month, so now £30 a month.

    If you're supplying regular meter readings, (if not then you should be) or there has been an actual meter reading, your supplier says, 'uh uh, halfwits not paying enough and is going to get into debt, we better increase his monthly payments', so they adjust your DD.

    To get your DD down again try and see if you can cut down on usage.
    Y'all take care now.
    • Hengus
    • By Hengus 17th Dec 16, 9:00 AM
    • 3,888 Posts
    • 2,173 Thanks
    Hengus
    • #4
    • 17th Dec 16, 9:00 AM
    • #4
    • 17th Dec 16, 9:00 AM
    Hi,

    For months you use 100 units a month so £15 a month, then a cold frosty snap, so using more heating and using 200 units a month, so now £30 a month.

    .
    Originally posted by frugalmacdugal
    The OP has asked a reasonable question; the above is not how it works. It works like this:

    You sign up to a Fixed Tariff with set prices for an agreed time ( say 12 months). Based on your projected annual usage of say 12000Kwhs/gas, the annual cost is projected to be £480 per year or £40 per month.

    After 6 months, the supplier reviews your projected annual usage based on 6 months worth of consumption. This calculation uses weighted %s to take into account usage for each month: that is, more gas used in February than June.

    On the basis of this re-calculation, let us assume that the supplier now estimates that you will use more than £480 per year projected cost. Its calculations show a revised annual cost of £540.

    The supplier then re-calculates the monthly payment by taking the new annual figure of £540 from which it deducts the £240 that you have already paid which leaves a balance of £300. If you have 6 months of your fixed term left, then the revised monthly DD payment will be £50 per month. The aim is to achieve a zero balance at the end of your fixed term contract.
    Last edited by Hengus; 17-12-2016 at 9:19 AM.
    • Cardew
    • By Cardew 17th Dec 16, 9:45 AM
    • 26,626 Posts
    • 12,875 Thanks
    Cardew
    • #5
    • 17th Dec 16, 9:45 AM
    • #5
    • 17th Dec 16, 9:45 AM
    I think many people think that a fixed rate is similar to an 'all you can eat' for £xx menu. Rather like the old 'Staywarm' tariff where you could indeed use as much gas/electricity as you wished for a fixed sum.(for the first year)
    • footyguy
    • By footyguy 17th Dec 16, 2:30 PM
    • 3,394 Posts
    • 1,333 Thanks
    footyguy
    • #6
    • 17th Dec 16, 2:30 PM
    • #6
    • 17th Dec 16, 2:30 PM
    Eveining all, I decided after nearly ten years of pre-payment on my gas & electric to sign up to a two year FIXED RATE agrement with Npower . All was well , I was paying £77 for both , ( A good saving! ) untill I recieved a email from Npower stating that my bill had gone up to £92 a month. You can call me a halfwit but I was under the impression that fixed rate meant that my bill would not be affected by any price rise? Am I missing somthing here?
    Originally posted by withnailuk
    You agreed to a 2 year fixed rate TARIFF.
    This means that the supplier will not change the agreed costs of that tariff for the duration of the contract.

    The way most suppliers establish your initial monthly direct debit payment is by calculating your assumed annual cost based on the anticipated annual consumption you advise them of, and dividing that by 12.

    If the supplier has considered it appropriate to increase your monthly payment by over 20%, you need to ask yourself why?
    Knowing that the tariff is fixed, then the only other reason is that the supplier believes you are using more energy than you anticipated when you joined them. Are you?

    Check the bills are based on actual, accurate meter readings

    If you are not using any more energy, then this MSE article may assist you
    http://www.moneysavingexpert.com/utilities/lower-energy-direct-debits

    However, if you agree you are using an increased amount of energy than you originally anticipated, then you should consult a comparison site to ensure you are still on the best deal for your increased usage. Don't forget to allow for early exit fees if appropriate.
    If you do decide there is a better deal available elsewhere, be aware that nPower will produce a final bill for you, which based on what you have said, will probably mean you will owe them money which they will want paying in full shortly after they issue that final bill.
    Last edited by footyguy; 17-12-2016 at 2:33 PM.
    • teddysmum
    • By teddysmum 17th Dec 16, 2:31 PM
    • 7,885 Posts
    • 4,697 Thanks
    teddysmum
    • #7
    • 17th Dec 16, 2:31 PM
    • #7
    • 17th Dec 16, 2:31 PM
    If you feel that your payments are not keeping up you can request and increase before the six month reassessment, to prevent an even larger increase later.


    I did this as my supplier automatically refunds any accumulation of credit over a certain figure, thus making my payments unable to keep up with winter usage. (The call centre person told me this would happen, when I rang to request an increase. duh.)
    • teddysmum
    • By teddysmum 17th Dec 16, 2:36 PM
    • 7,885 Posts
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    teddysmum
    • #8
    • 17th Dec 16, 2:36 PM
    • #8
    • 17th Dec 16, 2:36 PM
    OP, if you have phone, tv or internet on a fix, be aware that in the majority of cases the fix refers to a fixed percentage of discount and not a fixed monthly payment. Therefore the product could go up by £4, but if you have a fixed 50% off, you only pay £2 more (ie 50% of the increase).
  • archived user
    • #9
    • 17th Dec 16, 4:41 PM
    • #9
    • 17th Dec 16, 4:41 PM
    Just out of interest OP, have you signed up for a fixed tariff for your prepayment meters or have you had both meters exchanged to credit meters where you can really see a saving and get off the highest tariffs on standard/variable. This sounds similar to BG s con with their Fix and Fall tariff which is almost a standard tariff which falls if the prices fall.
    • Robin9
    • By Robin9 17th Dec 16, 5:58 PM
    • 1,478 Posts
    • 960 Thanks
    Robin9
    "Fixed" DD's continue to cause mis-understandings for Utility consumers.

    Many of us pay our Council Tax, Insurance by DD and that really is quite easy to understand as the annual bill really is fixed and the DD is the annual bill divided by 12 or 10 or 8. There is nothing to adjust.

    With Utilities the DD really are a best guess at the start of the year - the weather, changes in our lives all can alter our consumption and hence the amount we have to pay.

    Throw into the equation the consumer who ignores meter reading requests ................. and the result can be chaos.
    • cheesetoast
    • By cheesetoast 18th Dec 16, 10:09 PM
    • 246 Posts
    • 162 Thanks
    cheesetoast
    Consider this too.

    Let's say you're with Company A, who charges 10p a unit, and you're paying them £50 a month.

    Then, you switch to Company B, because they offer to reduce your payments to £40 a month. However, they don't tell you that they charge 20p a unit.

    After a year, you've not paid Company B enough, so they hike your payments to cover ongoing usage plus the previous shortfall owed.
    • Hengus
    • By Hengus 19th Dec 16, 8:46 AM
    • 3,888 Posts
    • 2,173 Thanks
    Hengus
    Consider this too.

    Let's say you're with Company A, who charges 10p a unit, and you're paying them £50 a month.

    Then, you switch to Company B, because they offer to reduce your payments to £40 a month. However, they don't tell you that they charge 20p a unit.

    After a year, you've not paid Company B enough, so they hike your payments to cover ongoing usage plus the previous shortfall owed.
    Originally posted by cheesetoast
    The message here is do your own calculations based on projected annual consumption in kWhs/year. I have switched 8 times in the past 2 years and I have never come across the scenario that you describe. I enter my projected consumption in a comparison site and it gives me an annual cost that I check. There is no way anybody to switch suppliers based on a monthly DD figure that they haven't checked.
    • waynebshaw
    • By waynebshaw 8th Jun 17, 3:54 PM
    • 1 Posts
    • 1 Thanks
    waynebshaw
    Fixed Rate price
    Having watched Martin Lewis on t.v at the end of Oct 2016 I finally got up off my backside and went on the USwitch website too change my energy provider. Martin must have repeated half a dozen times what are you waiting for its a fixed price you have got nothing to lose. He may well have explained the fact that it is the Unit price that is fixed, however I guess I heard what I wanted to hear and thought (like others) that it was a fixed price contract. I too signed up for a FIXED RATE agreement with Npower . All was well , I was paying £176 for both Gas and Electricity, (a saving of £54.00 per month on the combined costs I was previously paying EON and BG). Around 6 months later I received an email from Npower stating that my billing would change. I also thought that a fixed rate meant that my bill would not be affected by any price rise? I phoned and eventually spoke to a lady in their Customer Services who was very patient with me, explaining that if I did not pay more now then I would be left with a bigger bill at the end of the contract.
    I think it would be better if Martin Lewis states next time that it is a fixed unit price, however if after 6 months your usage has increased then you will have to pay more. He needs to ram that point home.
    • phillw
    • By phillw 8th Jun 17, 4:33 PM
    • 616 Posts
    • 271 Thanks
    phillw
    but I was under the impression that fixed rate meant that my bill would not be affected by any price rise?
    Originally posted by withnailuk
    It hasn't been affected by a price rise. It has been affected by how much you used, compared to how much they thought you would use.

    You can only fix the unit price and standing charge. They don't cut you off if you use more than they thought you would, or force you to pay for energy that they thought you would but ultimately didn't.

    Turn as much off as you can and maybe borrow an energy monitor if you want to know instantly how much energy everything is using.
    Last edited by phillw; 08-06-2017 at 4:38 PM.
    • macman
    • By macman 9th Jun 17, 12:04 PM
    • 40,953 Posts
    • 16,758 Thanks
    macman
    It's fixed rate, not fixed bill. Did you really think that you could use as much as you liked for £x per month?
    No free lunch, and no free laptop
    • Bigphil1474
    • By Bigphil1474 9th Jun 17, 1:28 PM
    • 659 Posts
    • 269 Thanks
    Bigphil1474
    Think of it this way - when you go to put petrol in your car, you pay the unit price at the time, which may change daily or weekly. If every time you filled up you put in exactly 25 litres in, the price you pay may change. With a fixed tariff deal it's the opposite - the price is fixed per unit, so every 25 litres would cost you the same every time throughout the fixed period. However, if you decide to start putting in 30 litres you'd pay more, but the unit price would be the same. Your DD has gone up presumably because they thought you'd be using 25 litres, but you've been using 30 litres and only paying for 25.
    Sorry, this analogy made sense when I started it.
    • bob bank spanker
    • By bob bank spanker 9th Jun 17, 8:30 PM
    • 378 Posts
    • 646 Thanks
    bob bank spanker
    Ouch.

    All the crap they teach in school these days, why don't they do a few practical things, like how energy bills work, or how to work out your income tax....
    • Shrimply
    • By Shrimply 12th Jun 17, 1:07 PM
    • 804 Posts
    • 418 Thanks
    Shrimply
    Ouch.

    All the crap they teach in school these days, why don't they do a few practical things, like how energy bills work, or how to work out your income tax....
    Originally posted by bob bank spanker
    You mean like reading, mathematics and applying logic to solve problems and answer questions?
    • teddysmum
    • By teddysmum 12th Jun 17, 3:05 PM
    • 7,885 Posts
    • 4,697 Thanks
    teddysmum
    Ouch.

    All the crap they teach in school these days, why don't they do a few practical things, like how energy bills work, or how to work out your income tax....
    Originally posted by bob bank spanker

    I used to be a maths teacher and money management was part of the syllabus.
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