is there a catch - energy fixing

keith1950

I have found that the most important thing is to pick the right time of the year to fix....usually March-April and also take 1year fixes.

Anyone switching to a fixed tarrif now has missed the best deals .

By following this I have managed to keep my energy costs level for about 5 years.

I accept that if you are not locked in you can ditch your fixed tarrifs if things change but in the first year most people have paid over the odds for it.

I worked out that if I took a four year fix and prices only rose 10-12% per year I would be around £200 worse off over the four years compared to shorter fixes taking into account cashbacks etc.

Cardew

nickcc wrote: »

Sorry still can't see how I'll be losing over 4 Winters. If, for example i was paying £1000 per annum to BG than switched to NPower and was then paying £1150 per annum. BG and NPower then increase their prices 4 weeks after I've switched so now the new prices would be £1100 and £1150 so I'm paying £50 per annum more to NPower. This time next year the unfixed price then rises to £1210 and my fixed price stays at £1150 so I'll be paying £60 less when prices rise next Winter. Take this to the following year and I'll still be paying £1150 when the unfixed price will be £1321 £171 more than I'll be paying, then the year after when I'll still be paying £1150 and the unfixed price will be £1453 which, if price increases continue at 10%, should give me a total saving of £484 over 4 Winters. All this is based on increase being maintained at 10%, if by any remote chance fuel prices come down I can then switch again without any penalty charges. My post was mainly intended for Macman but quoted the wrong post.

Your assumptions - and they are assumptions! are that prices will rise at xx%. You may well be correct and in which case you will make savings.

Most of us, including myself, who have a fixed tariff, take the gamble that in the long term we will be better off; but it is a gamble!

Of course you can leave your fixed tariff without penalty, but from when you went on that tariff, to the time you leave, you will have been paying more than you need to(about 15% at the moment)

What will happen if the Government moves the 'Green' and 'Social' levy from Utility companies to general taxation and tariff prices fall - but not fixed tariffs?

macman

nickcc wrote: »

Sorry still can't see how I'll be losing over 4 Winters. If, for example i was paying £1000 per annum to BG than switched to NPower and was then paying £1150 per annum. BG and NPower then increase their prices 4 weeks after I've switched so now the new prices would be £1100 and £1150 so I'm paying £50 per annum more to NPower. This time next year the unfixed price then rises to £1210 and my fixed price stays at £1150 so I'll be paying £60 less when prices rise next Winter. Take this to the following year and I'll still be paying £1150 when the unfixed price will be £1321 £171 more than I'll be paying, then the year after when I'll still be paying £1150 and the unfixed price will be £1453 which, if price increases continue at 10%, should give me a total saving of £484 over 4 Winters. All this is based on increase being maintained at 10%, if by any remote chance fuel prices come down I can then switch again without any penalty charges. My post was mainly intended for Macman but quoted the wrong post.

Which, of course, is a very big 'if' indeed. The wholesale buyers, with all their data input and computing power, can't see a year ahead, so how can you see 4 years ahead?
You may win, you may not. But it's certainly not a 'cannot lose' scenario. As I said, you've simply bought some expensive insurance.
As keith1950 rightly stated, it's the price you fix at that matters, not whether you fix. Those of us who fixed earlier this year will be paying a lot less than those fixing now as a reaction to the winter increase round-which has hardly come as a great surprise to most of us.

nickcc

apt wrote: »

You are currently paying about 15% more for your energy than if you took out the best 12-18 month fix. So if prices were to go up 10% per annum you'd make a saving (although for moderate users that could be matched by the couple of rounds of cashback that you would miss out on by having a longterm fix). If prices don't go up much you'll end up paying more but at least have the security of stable prices. Being able to switch without charge would not claw back the losses of paying substantially more over the next 12/18 months.

Following the recent price increase I am paying 5% more as I fixed just before the increase was announced so this time next year, if the prices continue to rise as they have previously, I should be 5% better off.

I_have_spoken

I took a gamble and didn't fix back in May/June, assuming there would be too much political aggro for another set if price rises with the 'green' scam.

Seems HMG is still willing to see 9% price hikes and pocket the tax :mad:

If you do fix, over read the meter by a bit, then you've pre-bought on the existing, cheaper tariff. Saved my £80 over just going onto the fix a few years back.

apt

nickcc wrote: »

Following the recent price increase I am paying 5% more as I fixed just before the increase was announced so this time next year, if the prices continue to rise as they have previously, I should be 5% better off.

No, you are still paying 15% more for the next year at least, because you could have taken out a short-term fix which also would not be affected by the last round of price increases. Another short term fix in 12 month times is probably still going to be slightly cheaper than your 4 year fix. It is in year 3 and especially year 4 that you may be paying less.

keith1950

No, you are still paying 15% more for the next year at least, because you could have taken out a short-term fix which also would not be affected by the last round of price increases. Another short term fix in 12 month times is probably still going to be slightly cheaper than your 4 year fix. It is in year 3 and especially year 4 that you may be paying less.

Spot on....he may only be paying 5% more than the alternative tariff he was offered at the end of a contract but you can only compare it against the best short term fix he could have taken.

When you also factor in possible cash-backs etc. available, the long term fix can work out much more expensive over the four years.

It is a gamble but I would rather hold on to my money in the short term.

Based on my own usage this year will cost me £1100 minus £100 (cashback) minus £20 (M&S Voucher)= Net cost £980.

The Npower 4 year fix would cost me £1430 so I would be £450 worse off in the first year........simples !!

But if you have a get out of the deal free card, like my 2017 fix with npower, I'm not sure how you can lose.

Because if you " get out " of it in the 1st or 2nd years you are already £100's of £'s down already.

Your usage may be different to mine but you have to compare each years saving against the best tariff you COULD have taken, not against what you were on !!

Cardew

I_have_spoken wrote: »

If you do fix, over read the meter by a bit, then you've pre-bought on the existing, cheaper tariff. Saved my £80 over just going onto the fix a few years back.

We live in a strange world where people openly boast about getting away with fraud, and advocate others commit the same crime.

wakeupalarm

Cardew wrote: »

What will happen if the Government moves the 'Green' and 'Social' levy from Utility companies to general taxation and tariff prices fall - but not fixed tariffs?

Isn't there some wording in the T&C that basically says that fixed prices are fixed unless the government levies forces them to increase prices. If that is the case then surely fixed priced tariffs should also fall if green taxes are removed from energy bills?

Cardew

wakeupalarm wrote: »

Isn't there some wording in the T&C that basically says that fixed prices are fixed unless the government levies forces them to increase prices. If that is the case then surely fixed priced tariffs should also fall if green taxes are removed from energy bills?

IIRC there is only a provision to change prices on a fixed tariff if the rate of VAT changes.

Being myself on a fixed tariff;), I obviously would argue that if a levy is removed the reduction should apply to all tariffs!

However I don't think this point is covered in the T&Cs and there is a counter argument that a fixed tariff is a fixed tariff - period.