If an energy company reduces prices, how is a fix affected

savetilibleed

If an energy company reduces prices (as BG have done), how is a fix affected with that or any other energy company? Does it remain fixed or does the fix reduce in line with reductions in standard variable tariffs?
Possibly a stupid question but......

[Deleted User]

I think the clue is in the word "fix " for the one or two year fixes, no drop in price for that but .BG s fix and fall tariff and standard/variable it will drop the 5%

naedanger

savetilibleed wrote: »

If an energy company reduces prices (as BG have done), how is a fix affected with that or any other energy company? Does it remain fixed or does the fix reduce in line with reductions in standard variable tariffs?
Possibly a stupid question but......

Usually the tariffs (i.e. the standing charges and unit charge rates) on a fixed term contract, as the name suggests, remain fixed for the full term. So they offer protection against rising energy prices - but in return - you won't benefit if prices go down.

However some contracts have a capped price rather than a fixed price. On these contracts the price cannot rise but may fall in some circumstances. In general you would expect the initial price to be higher than on a corresponding fixed tariff because unlike the fixed contract there is a possibility that the price may fall in future.

Finally it is often (but not always) the case that a fixed or capped contract will have an exit penalty. So customers are not able to cancel their fixed (or capped) contracts, for example if market prices generally fall, except by paying the exit charge.

If you are on such a contract, or are thinking of taking one out, the details of the charges, the circumstances (if any) in which prices will change and the levels of any exit charges will be specified in the account's terms and conditions.

JJ_Egan

A lot of the recent fixes have a no exit charge .

macman

Very few capped contracts around these days.
A fix is a fix, as the name implies-prices don't change.

footyguy

savetilibleed wrote: »

If an energy company reduces prices (as BG have done), how is a fix affected with that or any other energy company? Does it remain fixed or does the fix reduce in line with reductions in standard variable tariffs?
Possibly a stupid question but......

I'm not commenting on whether or not it is a stipid quesion, but I think it is answered, as far a BG is concerned, in the link I gave in the thread announcing the price cut.
https://forums.moneysavingexpert.com/discussion/5287022

With regards to other companies, of coures it doesn't affect them at all, although they may be nudged towards reviewing their prices to remain competitive, just in the same way as if Asda reduce the price of one of their products it does not directly affect the price of that product at any other supermarket.

You would need to see the details of any other price announcement by another company to see which particular tariffs of theirs that affects.

Finally, as I also mentioned in the BG price cut thread, do consult a comparison site to find the best deal for you as new/revised tariffs are being introduced all the time (and/or consider signing up for a notification service such as that provided by the CEC; other similar services are available)

polymaff

savetilibleed wrote: »

If an energy company reduces prices (as BG have done), how is a fix affected with that or any other energy company? Does it remain fixed or does the fix reduce in line with reductions in standard variable tariffs?
Possibly a stupid question but......

Not stupid, but maybe not the question you meant to ask.

Energy companies reduce prices by either cutting prices of one or more of their existing tariffs or by introducing new tariffs. There's no ambiguity about the term "fixed" - but in the latter case an energy supplier may allow you to switch from a "fixed" to another tariff at no charge - even if the old tariff has exit conditions.

savetilibleed

polymaff wrote: »

Not stupid, but maybe not the question you meant to ask.

Energy companies reduce prices by either cutting prices of one or more of their existing tariffs or by introducing new tariffs. There's no ambiguity about the term "fixed" - but in the latter case an energy supplier may allow you to switch from a "fixed" to another tariff at no charge - even if the old tariff has exit conditions.

This seems true of EDF certainly. They seem to issue new 'Blue Price Promise' tariffs regularly which can be moved seamlessly if appropriate. No exit conditions.

And as everyone says, fixed means fixed, unless you change.

Pincher

I must say that energy "fixed" tariffs don't really behave like proper foot binding mortgage fixed rate contracts.


If you had taken a two year fixed rate mortgage last year for say 1.99%, and you can now get a two year fixed for 1.29%, can you switch penalty free? Of course not, you have to pay a new arrangement fee, not to mention any exit penalties.


As far as I'm concerned, I switch to a new tariff if it's significantly cheaper, so I'm always on the cheapest tariff. There is no loyalty, commitment and penalties at all. Does seem a bit one sided.
Maybe all they are doing is to wiggle a bait every month or so, to keep me interested.