Martin Lewis told us to fix for 3 years - in October 2014

EAB2

In October MoneySavingExpert was telling people to fix prices until 2017

http://www.moneysavingexpert.com/news/utilities/2014/10/moneysavingexpertcom-launches-the-10-day-big-winter-switch-event

Yet now all the suppliers are dropping their prices so it looks like that was a very bad idea.


I wonder if the fact MSE is now a front for Moneysupermarket has anything to do with them trying to make commission from switchers?!

Lurker21

When things move in one direction, people start to believe things will always move in that direction: energy prices had been rising for years, everyone believed they would continue to rise. People even uglified their houses with solar panels on the basis energy prices would only go up and up.

We are entering a time of falling energy prices. Oil will stay cheap for the next couple of years, gas prices will keep falling, electricity prices will not rise.

EAB2

and in fact he's saying switch to a fixed rate even this week

http://www.moneysavingexpert.com/latesttip/?_ga=1.253280777.1847548503.1422114321#energy

Yet wholesale prices have fallen 30%. There is no reason to suggest that retail prices won't to follow that trend.

Remember when people were clamouring to fix their mortgage rate at 5-6%. Then the world collapsed and interest rates have been 0.5% for years. All those people overpaid thousands. The same is likely to happen if you fix your energy bill right now.

stator

EABowden wrote: »

and in fact he's saying switch to a fixed rate even this week

http://www.moneysavingexpert.com/latesttip/?_ga=1.253280777.1847548503.1422114321#energy

Yet wholesale prices have fallen 30%. There is no reason to suggest that retail prices won't to follow that trend.

Remember when people were clamouring to fix their mortgage rate at 5-6%. Then the world collapsed and interest rates have been 0.5% for years. All those people overpaid thousands. The same is likely to happen if you fix your energy bill right now.

Wholesale prices make up less than 50% of the bill, so a 30% fall in wholesale prices would never result in a 30% reduction in our bills.

Plus the increased charges for smart meters and the new energy capacity auction they just held. Bills may continue to go up due to the stealth taxes even if wholesale prices come down.

Lurker21

EABowden wrote: »

and in fact he's saying switch to a fixed rate even this week

Yes, but that's because the fixed rates are the best deals around.

What isn't realised is that you are not locked in to a fixed rate deal. For example, the Scottish Power Feb 2016 fixed rate is a great deal, but you can switch away from it any time you like with no penalty.

Fixed rate does not equal locked in.

CashStrapped

A "Fixed" tariff now covers a much wider variety of tariffs than it used to. It does not always mean you are locked in.

For exmple some fixed tariffs from EDF, NPower and EDF are fixed for a year, but you are not locked into them and can exit without a penalty.

These are usually no brainer tariffs. There is quite often no reason why someone would/should be on a standard tariff when these are avaliable. However people read the word "fixed" and think there is a restriction.

I would only ever switch on to one year fixed tariffs. I would consider a two year tariff if it was very very competative.

Then there are the 1 year - 2 year fixes that have exit penalties. I usually avoid these tariffs as I prefer the flexability.

Then you have your 3-4 year fixes which are ususally very uncompetative, have bigger penalties.

There used to be much less variety with "fixed" deals. The term can be rather misleading these days.

- Did not see your post Lurker21 - was typing at the same time -

Cardew

Even if the fixed tariff has a penalty for leaving, most of the penalties are fairly small.


Usually the company you are with on a fixed tariff, will let you switch to one of their tariffs if it is cheaper, without penalty.

aleph_0

Indeed, the big switch deal obtain only had a £30/fuel penalty, so if prices have come down enough, then people could still pay the penalty and switch.

It should be clear that fixing is not a guaranteed win long-term. You're choosing to fix at a certain price, the supplier can guarantee the price because they can set up futures contracts so they can obtain the fuel at price and they don't have to spend money on attracting you as a new customer for a few years.

But that price the market is offering is a balance-of-probability thing. If it was certain that the prices would go up so the fix was cheaper, everyone would fix.

System

I think that all of us were caught out by the rapid drop in oil prices. Just think about Scotland and the mess it would have been in had it actually achieved independence. Whether the advice comes from MSE or a man in the pub, at the end of the day, the choice of energy tariff is a personal decision. I have recently switched from a 2 year fixed deal to a one year fixed deal - saving about a £100 over the next 12 months.

The only certainty over the next few months is that we can expect the Chancellor to claim credit for the fall in oil prices, and the reduction in energy costs!

Pincher

Hengus wrote: »

Just think about Scotland and the mess it would have been in had it actually achieved independence.

I wish it did happen. Alex Salmond would have achieved Guy Fawkes status, and all the Scots begging not to leave would have been hilarious. I wonder where Alex Salmond could have run to to avoid getting burnt in person? Join the Jihad in Syria?


As for the OP, I have been on mostly short fixes for the last six years, between E.On and Scottish Power. It required no brainwork at all, because they were obviously CHEAP!


If prices are going to rise in three year's time, I'll pay it when it comes.
Why would I want to start paying it today?


There was a stonking good deal ten years ago: a five year fixed from British Gas. Would have saved thousands. Sadly, no such deal any more.


The persistent expectation thing can work the other way, mind.
The suppliers could get cocky and offer £999 fixed for three year deals, thinking oil prices are staying low long term. That's the time to grab a long term fix.


The fantasy is a £899 deal fixed for five years.
I will even go back to British Gas, if they offered it.

notbritishgas

Pincher wrote: »

I will even go back to British Gas, if they offered it.

So would I.:rotfl: