'Energy price cuts - were you wrong to fix? ' blog discussion

Former_MSE_Penelope

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 "Energy price cuts - was it wrong to fix? " Blog.

Please click 'post reply' to discuss below.

DelBoyPhil

I did a check and I would save £50 and thats about it.

VT82

You can't be serious in arguing that (not verbatem):

'by fixing, you're still paying less than the standard tariff, so you're quids in'

!!!

Anyone who fixed had already got to the point of doing a comparison, or at least getting off the standard tariff, so you can only compare the fix tariff they ended up with to one of the better variable rate deals. And when you do this, you are worse off.

And saying 'if you fixed before the last round of price hikes, you are better off', is also a bit suspect. I bet a large proportion of people who have fixed did it once you were screaming 'perfect time to switch'. And even for those that didn't, the 15% hike less the 5% reduction makes it about 10% higher, but how much of a premium are they paying anyway for the fix, meaning it probably ISN'T still cheaper?

MSE_Martin

VT82 wrote: »

You can't be serious in arguing that (not verbatem):

'by fixing, you're still paying less than the standard tariff, so you're quids in'

!!!

Anyone who fixed had already got to the point of doing a comparison, or at least getting off the standard tariff, so you can only compare the fix tariff they ended up with to one of the better variable rate deals. And when you do this, you are worse off.

And saying 'if you fixed before the last round of price hikes, you are better off', is also a bit suspect. I bet a large proportion of people who have fixed did it once you were screaming 'perfect time to switch'. And even for those that didn't, the 15% hike less the 5% reduction makes it about 10% higher, but how much of a premium are they paying anyway for the fix, meaning it probably ISN'T still cheaper?

No thats simply not correct - the above is an unfair attack and if you're going to do it - its important to check your facts first.

The CHEAPEST variable rates (pre cut) are £1,030 for a typical home the standard tariff (pre cut) £1,350. Yet the cheapest fixes were £1,000 so even compared to the bests variable rates around now were cheaper.

The below is a cut and paste from the weekly email in July 2011

British Gas up to 25% price hike. FIX NOW OR STICK
Urgent! Rumour the cheapest fix is likely to be pulled soon | EVERYONE check now
British Gas announced on Friday it'll hike prices an average 18% for gas and 16% for electricity on 18 August, hammering 9 million customers with a £190 avg rise. Dual fuel customers in some areas face worse rises of up to 25% (see British Gas hike news).


A typical home's avg costper year
Scottish Power standard (after rise)£1,390
British Gas standard (after rise) £1,286A
Average standard (today)£1,150
Cheapest fix (today)£1,000
Cheapest online deal (today)£940
estimated costs, varies by region

• EVERYONE check now, even if you're not with BG. This isn't just about BG or Scottish Power which has also announced rises. Energy companies are like sheep, so it's likely the others will follow soon. Check you're on the right tariff now.
• Fix NOW if you can't afford rises. A fix guarantees your rate won't rise for a set period, eg, two years. Millions on standard tariffs can typically save £150+ a year with the cheapest fixes, even before price hikes - and get added insurance against price rises. While online 'variable' deals are still cheaper now, just an 8% hike in prices, far less than predicted, would see them more expensive than fixes. Full 'fixing FAQ' in the Cheap Gas & Elec guide.

• Rumour! Cheapest fix likely to be pulled. We've heard one of the current cheap fix tariffs may be pulled any day. So if you're going to fix, speed is crucial (as this isn't about just fixing, but fixing cheaply).
• Speedily find your cheapest fix (and get cashback/wine). Plug your details into a comparison site and click the 'show only fixed tariffs' tab. Top Comparison: If it can switch you, Energyhelpline* pays £15 cashback per switch whether on gas, electricity or both. Dual Fuel: MoneySupermarket* pays £30 cash, Uswitch* a crate of wine, SimplySwitch* £40 cash (cashback only via these links not direct).

• If not fixing - STICK for now. If you don't want to or can't fix (eg, on pre-pay meter or super cheap variable tariff, so fixing's too costly) hold fire and wait until all the big suppliers have hiked prices to compare. Otherwise you could just be jumping from the frying pan into the fire by moving to a provider who then hikes prices even more.

Full tips, help and more cashback in the Updated Guide: Cheap Gas & Elec Related: Energy Efficiency Grants

cbrpaul

I decided to move to a short term fix 12 months ( EDF online saver V2) and i am still currently better off after the recent price drop.

However if there is anymore price drops between now and Sept 2012 i will start to re-think !!

JimmyTheWig

MSE_Martin wrote: »

No thats simply not correct - the above is an unfair attack and if you're going to do it - its important to check your facts first.

The CHEAPEST variable rates (pre cut) are £1,030 for a typical home the standard tariff (pre cut) £1,350. Yet the cheapest fixes were £1,000 so even compared to the bests variable rates around now were cheaper.

I don't have the facts and figures, but I am pretty sure that when we fixed around that time it would have been cheaper for us to go onto a non-fixed (but still tied-in) deal.
With hindsight we'd probably have ended up paying about the same on either deal, depending on what happens in the near future.
But we made the decision based on what was right for us (the fix looked cheap compared to what we suspected would happen to prices) so I'm not going to complain either way.

C_Mababejive

So EDF put up their prices by 15% then drop them by 5% and people are flapping that they have fixed?

These people can play the punters like a Stradivarius ..

jamesd

A reply to one of teh Facebook comments "So British gas cuts electricity, EDF and SSE cut gas! What on earth are these companies playing at? Do they take us for mugs?"

EDF electricity fuel mix: gas: 5.7% nuclear: 61.8% etc.
British gas fuel mix: gas 56.9% nuclear: 22.8% etc.

So a cut in gas prices will have minimal effect on EDF electricity costs but a large effect on British Gas electricity costs because one doesn't use much gas while the other uses a lot.

alexlyne

I'm fixed to march'12, so by then all players would have shown their hands (and probably actually gone through with the drop - considering that sse have anounced a price drop, but are holding it off until the end of march!)
At this point, I'll definitely be shopping around, and also looking more closely at splitting suppliers.
Oh, and I'm very happy I fixed!

SnowMan

I've just switched around 9th December 2011 to Npower Go fix 8 dual fuel (Norweb region).

Even after these price falls and even if the remainder of the big 6 announce similar falls (and I checked again yesterday manually adjusting for the falls) my tarriff is cheaper than any variable deal currently out there with the exception of First Utility who I deliberately avoided when switching.

And if there are substantial falls I have my £100 love to shop vouchers and £30 cashback (which I ignored in the previous paragraph) as an offset to any lower costs.

So very happy with my decision to go fixed.

I won't know until February 2013 whether I have got roughly the cheapest deal by going fixed but if I haven't so be it, that is the risk you take by going fixed. I won't be blaming anyone if it turns out that variable was with hindsight better, albeit my money is still on the fixed I went for being better than variable.

Some people have been looking at it too simplistically and assuming a fall in prices means they shouldn't have gone fixed. When the price falls have been taken into account by the comparison sites I suspect a fresh comparison will show that isn't the case for the majority of fixers (assuming they picked the cheapest fix at the time) and their fixes are still cheaper.

SnowMan

SnowMan wrote: »

I've just switched around 9th December 2011 to Npower Go fix 8 dual fuel (Norweb region).

Even after these price falls and even if the remainder of the big 6 announce similar falls (and I checked again yesterday manually adjusting for the falls) my tarriff is cheaper than any variable deal currently out there with the exception of First Utility who I deliberately avoided when switching.

Interestingly npower say in their press release today announcing their 5% gas price reduction

As well as cutting prices we have decided for the next two months to waive cancellation fees for customers on fixed price contracts who may now want to move to a cheaper npower tariff - although the longer term outlook cannot be predicted, so existing fixed price deals may still be an attractive option

Would they be doing that if currently running fixed rate contracts were such a bad option relative to varable contracts?

Perhaps it is also an indicator that further reductions in variable prices after this round of cuts, are not imminent.