To cap or not to cap?

bap98189

I have just received notification of a price increase from my electricity provider Manweb. They are putting up their prices by roughly 10%. We are on their Electricity Economy 7 Premier Plus tarrif, and the bills average about £55 a month - we have electric storage heaters and no gas.

I have plugged my details into uSwitch and know there are cheaper tarrifs out there, but the general opinion seems to be that all companies are going to up their prices in the next few months, so I am wary of switching at the moment.

Along with notification of their price increase, Manweb are offering to cap the rates for 18 months (until Oct 2007), as long as I agree to the offer before 24th March. And here lies the sticking point, I have to decide by 24th March.

Does anyone think accepting this capped rate would be a good idea? No further increases for 18 months seems like a tempting offer in the current climate.

There is no small print on the letter they sent. If I agree to this cap, will it lock me into a contract with them for the 18 month period and stop me switching at a later date?

mad

Here is an extract from an article I read recently it might help you with your decision

Tim Wolfenden, senior product manager at rival switching site Uswitch.com, agrees that most people will be better off disregarding the price cap deals at the moment.

"The price premium paid by switching over to the capped deal means that most of us will still be better off outside them. Consumers need to look at how much they could save with the cheapest provider and compare that amount to the capped deals, and then decide whether it's worth it."

For those cautious by nature, Baloch says capped tariffs offer peace of mind.

"By switching to capped, consumers can be sure that their rates will not go up for up to four years, enabling them to manage their bills better.

"Consumers may fear buying into such a long-term agreement, but there's no need to worry. The majority of capped tariffs no longer have costly cancellation fees or worrying tie-ins, so consumers can switch away if they find a better deal."

Hope that helps