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

kingstreet

EABowden wrote: »

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.

For thirty years I've advised borrowers to choose a fixed rate for payment certainty and not to expect to buck the market off the back of a rate increase from which you would be insulated.

If you don't feel the payment certainty to be of value to you, pick a variable product and take your chances.

No-one could have foretold the unprecedented reduction in the base rate from March 2009. IIRC commentators were anticipating increased rates in 2007/2008 in response to the credit crunch.

In a way an energy fix is more like a capped mortgage in that you have the certainty of the rate not increasing, but if prices fall you can usually switch away without penalty, unlike the fixed rate mortgage where there is no benefit to a rate reduction and a price to be paid to leave.

NittyGritty

EABowden wrote: »

In October MoneySavingExpert was telling people to fix prices until 2017

its simple, they get commission for each and every switch, so for every new deal that comes out, they will give u the "switch now"


I had to laugh when eon came out with the first price cut


MSE said switch now. rather than wait until the other 5 cut theirs,
its all about cash now it seems.

zagubov

NittyGritty wrote: »

its simple, they get commission for each and every switch, so for every new deal that comes out, they will give u the "switch now"


I had to laugh when eon came out with the first price cut


MSE said switch now. rather than wait until the other 5 cut theirs,
its all about cash now it seems.

Having said that, the MSE Energy Club is doing customers like me a favour, as we could all be reinventing the wheel by comparing every single deal every month, which I could never find the time to do. Plus it reminds us to not fall into their "teaser traps".

The companies don't want us to be able to compare them easily so any help we can get is better than nothing.

shortchanged_2

Personally I think the poor advice from Martin is for longer term fixes.

You pay a premium for the longer fix, the units rates are usually considerably higher.

Taking my example, I'm with first utility at present and I can switch my fixed tariff with them without charge as long as the deal I am going onto is longer than my current deal.

With prices the way they are going at the moment I have changed tariff a few times over the past year to cheaper tariffs as prices have gone down. Yes I will have to pay an exit fee if I change company within the term of the contract but I'm paying quite a bit less this year than I was this time last year and my current deal runs until march 2016.

cklass

EABowden wrote: »

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

Where in that article does he tell people that they should switch to the three year fix? It merely outlines the cheapest long term fix tariff available during MSE's Collective Big Switch event while also highlighting three other exclusive tariffs. They were just four of the available options for people to choose from if they were interested in switching. No single tariff was recommended over the others and the article is also completely transparent about the fact MoneySupermarket will profit from switches made through the Cheap Energy Club, so again, if you didn't want them to profit off of you, you had the choice not to switch to one of their exclusive tariffs. I'm struggling to see how it's Martin's fault if people chose to fix for three years when they could have opted for the E.On tariff or any other tariff.

lstar337

Lurker21 wrote: »

People even uglified their houses with solar panels on the basis energy prices would only go up and up.

Yeah, who cares whether a house is practical, so long as its pretty.

BTW, people with PV solar are still saving money, whether prices go down or not.

Smiley_Dan

Anyone that claims to know the future trend of energy prices, beyond short term market sentiment (which tends to follow trends) is a fool or trying to tell you something. It is too complex for any human to understand.

NPowerUser

When this website was sold, part of the deal was based on achieving certain sales figures.

Switching energy suppliers is crucial to achieving this aim.

Little surprise then that the emails and website push switching so often.

If you knew interest rates were likely to fall would anyone be crying out to fix a mortgage for 3 years?

Don't con yourself into thinking "well its only a £30 exit charge for each utility" That can work out at 5% of your annual bill.

Don't catch a falling knife. With better deals likely to happen over the next 12 months, falling global energy prices and the election in May, where no doubt Millipede will realise the error of his ways and just give more powers to the regulators.

Beware of snake oil salesman and emails bearing gifts!

System

NPowerUser wrote: »

Beware of snake oil salesman and emails bearing gifts!

I agree. The MS Energy Club is only one of many switching sites. I am using it for my latest switch as the cashback effectively reduces my exit fees from £60 to £30. People have to do their own research, and decide what is best for them. At the very least, this site and others encourage me to do a few sums to check my energy deal. This cannot be a bad thing. Remember, having done the research, there is nothing to stop anybody dealing direct with their chosen supplier.

EAB2

The suppliers always claim they buy their gas 'well in advance' when challenged about not passing on savings to consumers.

So predicting retail gas prices is totally different to predicting mortgage rates. The wholesale price of gas had fallen 25% so the retail price must fall more than the paltry 4-6% offered so far.

Fixing for three years as suggested by moneysup, sorry, money saving expert, at the end of last year, was madness.

As is regularly paying an exit penalty