Capped Rate Energy - Are you tied in???

4_Pete's_Sake

Most of us money savers are likely to have taken advantage of one of the many capped rates provided by various energy companies, but have you read the T&C should you want to exit early.

These capped rates are fine while prices are rising, however when they start falling in about the spring of next year it may get to the stage where there are lots of deals better than the capped rate that you are paying.

It is unlikely that there will be any obligation on the company to reduce your capped rate, even if their standard tariff becomes cheaper than the capped rate that you are paying.

You may also be penalised in the event that you want to move to another company before the end of your capped rate, there may even be a tie-in for a period after the end of your capped rate.

Please ensure that you check all the T&C if you are thinking about leaving a capped rate energy deal to ensure that you are not penalised. If the T&C are not clear then call your energy provider's Customer Services for confirmation. :think: :think: :think:

Gal

If your on a capped rate with powergen - Your prices would come down in the result of any decrease.

Also there is no termination fee - So your free to come off whenever you like - The only thing is you have 14 days to come off when you originally sign up and you have to be on it for a further 28 days after.

If you move you can also take the capped price with you. (Providing the meter at your new property isn't E10, Heatwise or Maximum Demand)

Cardew

A capped rate is different to fixed rate.

BG have some fixed rates tariffs, but IMO the penalties for leaving are not large enough to deter people changing should prices drop sufficiently. However can anyone seriously see prices reduce that much next year?

I don't doubt there will be a drop, accompanied by huge publicity, but I suspect they will not be substantial.

4_Pete's_Sake

The Capped rate that you start on is usually higher than a companies standard tariff by a few percent. I wonder it this percentage margin will remain the same if prices do fall, I somehow doubt it unless OFGEM watch each company very carefully.

You only have to look at companies like npower which have 6 different online tariffs and if you are on an older one you cannot move to the newer offering as it is limited to new customers.

Cardew

peterlittleton wrote:

The Capped rate that you start on is usually higher than a companies standard tariff by a few percent. I wonder it this percentage margin will remain the same if prices do fall, I somehow doubt it unless OFGEM watch each company very carefully.

You only have to look at companies like npower which have 6 different online tariffs and if you are on an older one you cannot move to the newer offering as it is limited to new customers.

I agree.

Most of the companies have a variety of different tariffs, with differing incentives and discounts for dual fuel, paperless billing, direct debit etc and seem designed to obfuscate.

They seem to have copied the example of Banks with their differing interest rates and the accounts with the more attractive rates only open to new customers.

It is a pity that there aren’t more firms like Ebico with one simple tariff.