capped prices or not ?

windsor_2

are the power "capped price" offers worth considering ?
scottish power are offering capped prices to april 2007 at cost of £2.50 per month
any experiences / guidance ?

Grimbo_2

I can advise you on the type of capped tariffs often offered to customers with british gas (do I hear boo, hiss ? )

Basically the tariffs on offer are a kind of insurance, used to retain your custom and of course try and save you some money long term... but with any insurance policy will you ever see the benefit of it ?

The first type of offer is a straight forward cap on your prices, which normally happens in the form of a 2% or so rise in your prices now which then remain fixed at level for the next 2 years. So at the moment you will be paying more for your gas and elec than anyone else but is there going to be another price rise later this year of some 5% to 10% as the trend has been then you will be saving money on your unit prices, then if there are price increases again through 2006 you really are going to be paying alot less than joe public.

The big gamble is how long are you going to be paying at the higher prices before the general market prices increase ? looking at the current market state I can say with a high degree of certainty prices will rise before the end of 2005, given that scenario then yes you will save money..... the only downfall then is the sharp hike in your bill you will notice when you emerge from the price protection in april 2007. If from the time you joined the tariff to when you emerge prices have risen year on year by 10% you will really notice the difference when you get your first unprotected bill..... but hey 2 years ofmoney saving is better than no years right ?

Now the second option you have which BG arent heavily advertising and not alot of other companies do actually offer is something called a fixed price electricity tracker (note this is for ele only). Now the main difference of this to the first is that you are not protected against price increases, but you at all times again, subject to the april 2007 rule, pay at a certain level below the market rate. It is subject to which region you are in but typical values of deduction are between 7 and 10 percent. so for example if you phoned up and opted for the elec tracker your prices would drop by the typical value mentioned but if the prices increase in a few months time yours will too but still remain at a 7 to 10 percent price level below the current market prices.... i hope thats explained clearly enough.

In any case I think a capped tariff is a good thing but its really down to you as a consumer. Also these offers tie you in long term and if you break the agreement your often subject to a £25 fee per energy supply, so £50 for both gas and elec. But then again if you have no intentions of leaving a scheme before the 2 years have elapsed then I see no disadvantage... regardless of which company you opt to supply you on a capped tariff.

=BOB=

squeaky

So basically you are betting that the prices will go up? By more than your fee increase already?

How late will you be able to take this deal? There's no point in taking this deal too early because you'll be paying the fee for nothing - effectively. Just so long as you make sure you get in before the close or any big hike in prices.

Am I reading this right? Any pitfalls I've missed?

John_Gray

The most recent information on "gas price futures" I heard was a piece on Working Lunch

Just depends on who you choose to believe!

John

squeaky

Quoting the article:

A stormy forecast

As the price of gas has been going up, the energy regulator, Ofgem, has been trying to reassure consumers that they won't be going short.

And yet prices for future supplies of gas have risen by as much as 50% since earlier this year.


Doesn't sound too promising there does it?