'“…but if I fix my energy bill, will I be hit by a price hike ...”' blog discussion

Former_MSE_Lee

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's "... but if I fix my energy bill, will I hit be hit by a massive price hike when it ends?" Blog.

Please click 'post reply' to discuss below.

wakeupalarm

Why do the figures in the article show the shift to 2 yr fix change the bill amount but staying on your existing standard tariff leave the price you pay the same? This is too confusing to work out.

michaels

I think you may be fighting a losing battle here Martin - too many can't do the maths or understand the numbers - remember the response to the take 100 quid now or 1000 in a years time blog...

I got a good gas fix last year and to refix this year puts the bill up from 980 to 1400pa - just glad I fixed last year.

If fixing was like locking in to a mobile tariff then it would be a risk - however the highest early termination tariff I have ever seen is only £50 so there is no risk of getting stuck on an unreasonably high fix should prices fall.

I have gone for a capped tariff this time - no more than the best fixed and the possibility of following prices down or no penalty switch should something better come along for gas - and of course the withdrawn go fix 6 for electric

Mobeer

Your example seems a bit misleading in suggesting that a fixed rate deal is automatically cheaper than a variable rate deal in the first 12 months.

From here:
http://www.moneysavingexpert.com/utilities/you-switch-gas-electricity#fixfaq

I quote:
Cheapest fixed tariffs £1,000/year
Cheapest online variable tariffs £941/year.


Based upon these, a 15% rise in the cheapest tariff gives £1082/year

JimmyTheWig

please tell me if I’ve missed the point of the problem

Martin,

What you've described is what I would guess the problem would be.

However, another explanation could be from people who have been hit in the past by "deals" that have lowered their monthly direct debit.
If someone's currently paying £100 a month, a dodgy salesman could say "come to our company and we'll set your direct debit to £80 a month". Consumer likes the idea of saving £20 a month so switches.
But what the salesman didn't mention was that the energy they were using was going to cost the same as with the old company, so in a year's time the customer gets hit with a bill for £240. In effect all they've done is underpaid for 12 months.

I know that this has happened to many people in the past. Maybe they're wary that this is what is being suggested now. I.e. current bill is £100 a month. Some bright spark on the internet suggests they "fix their direct debit" at £100 a month. Prices go up, but their direct debit is fixed. At the end of the year they'll get a big fat bill.
Obviously that's not what you're suggesting, but I don't know if everyone realises that.

How easy would it be for you to directly ask some of the people who have said it?

kittykitten

All this talk of the end to cheap deals is really starting to worry me!

Now don't get me wrong, I understand completely the idea of fixed tarriffs, and why fixing at this point is a good thing, but the problem is, I can't! I'm currently living with my parents, so pay my share of the energy bills through my board. But I'm currently supposed to be buying a house, although it's taking forever! We've finally set a completion date of 29th July, so all being well I'll have the keys in my hand in 9 dyas time - eek!

Problem being, I've been lead to believe (rightly or wrongly) that once I'm in the house it'll take 6-8 weeks before I can change the G&E suppliers, so I'll be stuck at first with the standard tarriff from EOn, who currently supply the house dual fuel. By the time 6-8 weeks has passed all the good deals will have gone. Is it possible to get a quote now, and it still be valid later, like insurance? And how do I estimate how much power I'll be using?

Sorry for hijacking the discussion, but I need help!

JimmyTheWig

kittykitten, I would guess that the 6-8 weeks timescale is the time it takes to switch. I.e. someone who finds a deal today and goes for it will be on their existing tariff for 6-8 weeks before the transfer to the new supplier kicks in.
So you can certainly grab the best deal available on the day you move. Yes, you'll be paying e.on for 6-8 weeks, but that's not a problem.
You _might_ be able to sign up to a deal once you've exchanged contracts (having a completion date isn't good enough as things could still go wrong, but once you've exchanged that's it) but I don't know.

MSE_Martin

Mobeer wrote: »

Your example seems a bit misleading in suggesting that a fixed rate deal is automatically cheaper than a variable rate deal in the first 12 months.

From here:
http://www.moneysavingexpert.com/utilities/you-switch-gas-electricity#fixfaq

I quote:
Cheapest fixed tariffs £1,000/year
Cheapest online variable tariffs £941/year.


Based upon these, a 15% rise in the cheapest tariff gives £1082/year

The blog is very strong that Im talking STANDARD (not online) tariffs - and explain those on cheap online deals may need pay more to fix and link to Fixing FAQ for tha.t

raphanius

bearing in mind that trying to work out my energy usage is rocket science how do i know which tariff is better? i am currently on a no standing charge tariff making it impossible to compare with a fixing tariff with standing charge.

JimmyTheWig

raphanius wrote: »

bearing in mind that trying to work out my energy usage is rocket science how do i know which tariff is better? i am currently on a no standing charge tariff making it impossible to compare with a fixing tariff with standing charge.

Do your existing bills not give you your current usage?

raphanius

JimmyTheWig wrote: »

Do your existing bills not give you your current usage?

haha youve obviously never seen a southern electric pdf bill.over the winter quarter 2010/2011 i was charged electric and gas at three different rates. as i said rocket science.

when i put my tariff through uswitch to compare it says i spend £1200 on fuel if i then input as a british gass user to try and find a competing tariff it says i use £1100 worth of fuel a year. i cant find the fixing tariff ive been offered on any comparision websites so how do i know i'm getting a better deal?