Fixed Energy Tariffs

Glebe

I recently switched energy supplier through MSE's Cheap Energy Club on a 12 month tariff with First Utility. One month on, they have now offered me a fixed 3 year deal on a higher rate and I don't know whether I should switch to the longer fixed tariff or stick to the 12 month deal.

matelodave

In my opinion it's better to stay on 1 year contracts at the moment and see what next spring brings.
Tying into a three year one looks quite expensive at the moment - you need to do your own sums to see how much more it would cost to leave your existing contract and pay for a year at the higher cost.

Pincher

Treat this like a maths exercise.


Question: I want to pay more from today, instead of three years from now, BECAUSE...................

[Deleted User]

In the last three years I've got a cheaper deal every year...

System

http://www.telegraph.co.uk/finance/personalfinance/energy-bills/11179753/As-experts-predict-falling-energy-bills-should-you-fix.html

Swipe

Don't do it. You fixed for 12 months for a reason. Why throw that all away and pay a higher rate that you'll be stuck with for 3 years? What happens in 18 months' time when they offer you another 3 year year fix at an even higher rate?

catwoman73

Pincher wrote: »

Treat this like a maths exercise.


Question: I want to pay more from today, instead of three years from now, BECAUSE...................

Exactly. I'm thinking that all this scaremongering about rising prices and being encouraged to lock into long term fixes is a ruse to trick people into locking into higher prices for the longer term.

I probably wouldn't fix for longer than 12/18 months unless the price was similar to a shorter fix.

I'm lucky that I can afford slightly higher energy prices if necessary and don't need price certainty. I once read something that I always bear in mind - It was about mortgages, but I think the same sentiment applies to utilities - the people setting the fixed rates know an awful lot more than even well informed consumers about the state of the market and what may happen in the future and they use this information to their advantage to manipulate customer behaviour.

Customers often do well to ignore the apparently well intentioned advice of the suppliers. After all, what the supplier wants is for customers to stay with them for the long term and to pay the 'full' price.

With mortgages, before the base rate fell to 0.5%, it was all about 'remember 15% interest rates, your mortgage could go up massively, fix with us for 10 years to avoid this risk' and many people did, and are left paying a lot more than what a base rate tracker would be, but can't change or often even move house without paying massive penalties.

I've never had a fixed rate mortgage, and with the exception of a few months where I was paying 0.25 or 0.5% more than what the fixed rate would have been, not been disadvantaged. In fact, I am currently benefiting massively, as I am on a lifetime base rate tracker at BBR+0.39% :T

Pincher

catwoman73 wrote: »

I've never had a fixed rate mortgage, and with the exception of a few months where I was paying 0.25 or 0.5% more than what the fixed rate would have been, not been disadvantaged. In fact, I am currently benefiting massively, as I am on a lifetime base rate tracker at BBR+0.39% :T

With energy prices, it's only ever going to be one or two hundred pounds a year difference, so it's a bet with very little downside. With mortgages, it's thousands of pound a year.




At BOE+1.75%=2.25%, I was expecting Mortgage Express to give me a discount offer to depart, no such luck. It's a Buy To Let, so the interest is tax deductible, but still not as good as yours. What with lenders reneging on their skinny trackers, like the Skipton, claiming "extraordinary circumstances", you are very lucky Barclays/Woolwich hasn't sent a Ninja at night and terminated you with extreme prejudice.