What the hell does fixed rate really mean?

System

cheesetoast wrote: »

Consider this too.

Let's say you're with Company A, who charges 10p a unit, and you're paying them £50 a month.

Then, you switch to Company B, because they offer to reduce your payments to £40 a month. However, they don't tell you that they charge 20p a unit.

After a year, you've not paid Company B enough, so they hike your payments to cover ongoing usage plus the previous shortfall owed.

The message here is do your own calculations based on projected annual consumption in kWhs/year. I have switched 8 times in the past 2 years and I have never come across the scenario that you describe. I enter my projected consumption in a comparison site and it gives me an annual cost that I check. There is no way anybody to switch suppliers based on a monthly DD figure that they haven't checked.

waynebshaw

Having watched Martin Lewis on t.v at the end of Oct 2016 I finally got up off my backside and went on the USwitch website too change my energy provider. Martin must have repeated half a dozen times what are you waiting for its a fixed price you have got nothing to lose. He may well have explained the fact that it is the Unit price that is fixed, however I guess I heard what I wanted to hear and thought (like others) that it was a fixed price contract. I too signed up for a FIXED RATE agreement with Npower . All was well , I was paying £176 for both Gas and Electricity, (a saving of £54.00 per month on the combined costs I was previously paying EON and BG). Around 6 months later I received an email from Npower stating that my billing would change. I also thought that a fixed rate meant that my bill would not be affected by any price rise? I phoned and eventually spoke to a lady in their Customer Services who was very patient with me, explaining that if I did not pay more now then I would be left with a bigger bill at the end of the contract.
I think it would be better if Martin Lewis states next time that it is a fixed unit price, however if after 6 months your usage has increased then you will have to pay more. He needs to ram that point home.

phillw

withnailuk wrote: »

but I was under the impression that fixed rate meant that my bill would not be affected by any price rise?

It hasn't been affected by a price rise. It has been affected by how much you used, compared to how much they thought you would use.

You can only fix the unit price and standing charge. They don't cut you off if you use more than they thought you would, or force you to pay for energy that they thought you would but ultimately didn't.

Turn as much off as you can and maybe borrow an energy monitor if you want to know instantly how much energy everything is using.

macman

It's fixed rate, not fixed bill. Did you really think that you could use as much as you liked for £x per month?

Bigphil1474

Think of it this way - when you go to put petrol in your car, you pay the unit price at the time, which may change daily or weekly. If every time you filled up you put in exactly 25 litres in, the price you pay may change. With a fixed tariff deal it's the opposite - the price is fixed per unit, so every 25 litres would cost you the same every time throughout the fixed period. However, if you decide to start putting in 30 litres you'd pay more, but the unit price would be the same. Your DD has gone up presumably because they thought you'd be using 25 litres, but you've been using 30 litres and only paying for 25.
Sorry, this analogy made sense when I started it.

bob_bank_spanker

Ouch.

All the crap they teach in school these days, why don't they do a few practical things, like how energy bills work, or how to work out your income tax....

Shrimply

bob_bank_spanker wrote: »

Ouch.

All the crap they teach in school these days, why don't they do a few practical things, like how energy bills work, or how to work out your income tax....

You mean like reading, mathematics and applying logic to solve problems and answer questions?

teddysmum

bob_bank_spanker wrote: »

Ouch.

All the crap they teach in school these days, why don't they do a few practical things, like how energy bills work, or how to work out your income tax....

I used to be a maths teacher and money management was part of the syllabus.