Has Martin Mis-Advised Us Into Capping Our Fuel Rates?

mitchaa

Well Martin, if you are reading..

Are you still confident that your advise on capping energy rates was a good decision? I suspect many thousands of people followed your advice.

Im not so sure, fuel costs as in petrol and diesel have been slashed dramatically in the last month or so.

Surely it's only a matter of time before Gas/Electric follow suit? After watching Watchdog on Monday evening, it looks very likely that they will infact be coming down fairly soon.

So has anyone here capped their rates? If so, are you happy with this decision, and what do you predict happening within the next 6 months?

Mitchaa

1carminestocky

After wavering slightly, I decided to go against Martin's advice to cap/fix but, of course, hindsight is a marvellous thing, I suppose, and it's STILL not a certainty that bills will go down (although the energy compnies are starting to look like their game is up and and are currently beleaguered by industry heavyweights piling into them with massive critcism).

Martin is definitely a hero of mine and I really admire the stance he takes with big companies but I said it at the time so I'm not trying to be 'wise' after the event - I think he may (inadvertantly) have played into the energy compny's hands by his behaviour on gmtv that fateful morning...


Edit: PS Here's a radical idea - why don't the Govt force the energy companies to scrap the financial penalties connected to their fixed/capped deals? Would be a very popular move with the electorate and would also be seen to encourage more competition.

KimYeovil

1carminestocky wrote: »

Edit: PS Here's a radical idea - why don't the Govt force the energy companies to scrap the financial penalties connected to their fixed/capped deals? Would be a very popular move with the electorate and would also be seen to encourage more competition.

Making them the same price as the other tariffs? Radical but tautological.

Premier_2

Well mitchaa, if you are reading..

This website is based on journalistic research. It does not constitute financial advice. Any information should be considered in regard to specific circumstances. All tips are followed at your own risk and should be followed up with your own research .

Found at the bottom of every page on this site

mitchaa wrote:

...So has anyone here capped their rates?...

No. If you look back in this forum to about April you will see that I read Martins advice ... in full including the disclaimer...and followed it. I found that by my own research that I could save money by switching supplier but that the premium for fixing/capping the rate was too big a gamble. Therefore I remained on a non-fixed/capped tariff.

I believe at least one set of people he was advising on 'It pays to watch' came to a similar conclusion and Martin was quick to acknowledge that because of the premium demanded for a fixed rate tariff compared to a lower tariff non-fixed/capped available by a different supplier, then he could fully understand the reason not to fix/cap in that instance.

jtb2412

I believe Martin did say that if you can afford to ride it out then do so (might have dreamed it though so maybe someone would like to correct me if i'm wrong ! lol)

We didn't cap because we could afford to ride it out but as has been said before, it's not definite the prices WILL come down and even if they do, you can bet they will go back up again so all may not be lost !

mitchaa

Premier wrote: »

Well mitchaa, if you are reading..


Found at the bottom of every page on this site


No. If you look back in this forum to about April you will see that I read Martins advice ... in full including the disclaimer...and followed it. I found that by my own research that I could save money by switching supplier but that the premium for fixing/capping the rate was too big a gamble. Therefore I remained on a non-fixed/capped tariff.

I believe at least one set of people he was advising on 'It pays to watch' came to a similar conclusion and Martin was quick to acknowledge that because of the premium demanded for a fixed rate tariff compared to a lower tariff non-fixed/capped available by a different supplier, then he could fully understand the reason not to fix/cap in that instance.

Granted, yes there is a disclaimer.

However, there are also many thousands of trustworthy people up and down the country that would have happily trusted an experts advice and not done any research on the subject.

There is no blame or fault here, just wondering if any of those who have capped may regret doing so in the coming months.

Martin did make a big issue out of this, not just on this website but on television and in the papers.

nomoneytoday

It's a cap, not a minimum charge
I read that as the max charge can be set, but the costs can come down too

mitchaa

nomoneytoday wrote: »

It's a cap, not a minimum charge
I read that as the max charge can be set, but the costs can come down too

I wasn't aware of that, thanks.

Not sure what would be in it for the energy companies then If your statement is true then there would be absoloutely no risk to the consumer?

For example and using imaginary numbers..

Cap @ 15p per unit.
Energy rises to 25p per unit.

So consumer 'wins'

Cap @ 15p per unit.
Energy drops to 5p per unit

Consumer still 'wins' as he now gets the energy at 5p

Doesn't make sense to me, i would have thought in this example, energy prices would be @ 5p but due to the fix they signed for they have agreed to pay x amount of months at the 15p rate?

Apologies, that's the way i understood it?

Perhaps i should have done more research if this is true then?

nomoneytoday

mitchaa wrote: »

I wasn't aware of that, thanks.

Not sure what would be in it for the energy companies then If your statement is true then there would be absoloutely no risk to the consumer?

For example and using imaginary numbers..

Cap @ 15p per unit.
Energy rises to 25p per unit.

So consumer 'wins'

Cap @ 15p per unit.
Energy drops to 5p per unit

Consumer still 'wins' as he now gets the energy at 5p

A capped price and fixed price are 2 slightly different products

Using your example, you may find the drop is down to say 7p whereas everyone else drops further to 5p

As you said, there is no such thing as a free lunch

1carminestocky

KimYeovil wrote: »

Making them the same price as the other tariffs? Radical but tautological.

No, the implied (maybe I should have spelled it out more forceably) gist of my radical idea was to make it much easier to switch to ANOTHER supplier...removing the financial penalty for doing this would, you would imagine, facilitate this, no?

I could try and say this in another way but THAT would be rather tautological, I suppose....

Cardew

Quote:

It's a cap, not a minimum charge
I read that as the max charge can be set, but the costs can come down too

mitchaa wrote: »

I wasn't aware of that, thanks.

Not sure what would be in it for the energy companies then If your statement is true then there would be absoloutely no risk to the consumer?

I think there is some confusion between 'Capped' and 'Fixed' Tarrifs.

The majority of tariffs on offer have been fixed tariffs. e.g. BG's 2009, 2010, 2011 and current 2012 tariff.

The risk(as you put it) is that some of these capped/fixed tariffs were at a premium over the Standard Tariff and generally have penalties for leaving early. The premium over the Internet accounts was of course much greater.

The gamble was, and is, on the movement of prices during the term of the fixed/capped tariff.

However generally the penalty for leaving early will not be a great deterrent if prices drop sufficiently and anyone feels they have backed the wrong horse.

Your point:

there are also many thousands of trustworthy people up and down the country that would have happily trusted an experts advice and not done any research on the subject.

is agreed.

This is of course the basis of the flak that Martin is taking over his 'Best Buy' recommendation for Icelandic banks that have gone bust.

Without re-visiting that subject, Martin has made a career from this website and the Media and has set himself up as the money saving Guru and it is reasonable for some people to think that his recommendations are carefully researched and can be trusted.

Personally I wish his media appearances contained more 'health warnings'.