MSE News: Energy bills set to rocket for millions as price cap is hiked by £139/yr

UnclaimedEnergy

variant said:

This is a serious kick in the teeth.
How can they justify hiking prices so much during a pandemic. Share holders should bear the brunt and profit expectations should be downgraded. All of the utilities companies should not cause more financial hardship.
PANDEMIC.!!!!!!!
Im disgusted with this.
Their moral compass needs some serious adjustment.😤😤😤😤😤😤😤

What profit expectations?

Suppliers don't make profits lol.

Sure, for people that don't/can't switch, they're bills are rising due to the cost of wholesale is increasing. It sucks for them, but it is what it is. No point forcing nearly every supplier to go bust to cover the rise of wholesale market.

If suppliers go bust, this further increases bills for everyone due to things like credit balances being paid for by other suppliers.

lewizmajic

I'm a bit confused by this. I'm looking at deals to switch to, but if I go for a variable rate, does today's news mean the rate will be increased straight away?

[Deleted User]

lewizmajic said:

I'm a bit confused by this. I'm looking at deals to switch to, but if I go for a variable rate, does today's news mean the rate will be increased straight away?

No. You sign up to the rate that is on offer. The present cap runs through until the end of September. It the supplier decides to increase the tariff in October, then it has to give you a period of notice (check the contract terms and conditions). You can then switch away without penalty or, do nothing, and just accept the higher price.

Remember the cap is an upper limit. Suppliers are free to set their own SVT but the cost must not exceed the cap cost. The cap assumes a given number of kWhs/year: use more and you will pay more.

tghe-retford

We are possibly heading toward the biggest energy crisis since the 1970s and certainly so within the timeframe of privatised energy companies. The price hikes I have already seen, even when lockdowns were still in effect in a large swathe of the world, have been well beyond inflation, getting toward 40% anecdotally. And they have also exceeded the inflation busting increases I saw during the financial crisis. This is not sustainable.

I fear what is coming. The lower priced suppliers (namely the ones on here people take advantage of) will either go bust, leaving us all in the joy of the supplier of last resort or having our supplies switched to a more expensive provider (as I have had when Toto moved me to Utilia) because we're loss-making for them. Subsequently the costs of that will add more to everyone in the future, reduce competition and increase prices still further. We'll also see, as in other industries, other ways to generate revenue outside of unit prices and standing charges to get around the cap that won't fall foul of Ofgem.

I can imagine Ofgem will be under great pressure to axe the price cap now, so that prices can go from rocketing to light speed. The argument will be that jobs and businesses are under threat if they don't.

And we've not even got to the cost of going green yet!

It's going to be an awful winter, for both the poor and those who are in the energy industry.

GunJack

[Deleted User] said:

I would encourage those that can to take a look at the article in today’s Daily Telegraph written by Stephen Littlemore - an ex CEO of Ofgem. He opines that the price cap is now no longer needed, and that Ofgem’s proposed automatic switching of consumers is a very bad idea. 

The thought of auto switching is soooo bad, it should not even be suggested tbh..... If customers are so inert they won't switch for themselves how on earth are they going to cope with being auto switched????

SavingsSeeker

I am currently on a variable tariff with Igloo energy. They are currently one of the cheapest variable rate energy providers in the market. However, with the Ofgem price cap increase looming, I was wondering whether it would be prudent to move to a fixed price tariff before the increase. Would like your thoughts and advice before I make a decision. Thank you. 

[Deleted User]

luke_alexander said:

I am currently on a variable tariff with Igloo energy. They are currently one of the cheapest variable rate energy providers in the market. However, with the Ofgem price cap increase looming, I was wondering whether it would be prudent to move to a fixed price tariff before the increase. Would like your thoughts and advice before I make a decision. Thank you. 

The Cap has effectively become a SVT floor and ceiling. Suppliers can legally increase their standard variable tariff rate to the level of the Cap. Fixed price tariffs tend to cost less than SVTs.

The other question that you need to think about is whether your present supplier is one that might struggle this coming Winter? There are early signs that a number of suppliers will go to the wall.

bristolleedsfan

Dolor said:

luke_alexander said:

I am currently on a variable tariff with Igloo energy. They are currently one of the cheapest variable rate energy providers in the market. However, with the Ofgem price cap increase looming, I was wondering whether it would be prudent to move to a fixed price tariff before the increase. Would like your thoughts and advice before I make a decision. Thank you. 

Fixed price tariffs tend to cost less than SVTs.

Just done a dual fuel search on Uswitch, including tariffs that cannot be switched via Uswitch, these are the energy companies who are offering dual fuel fixed rate tariffs that do not exceed current energy cap

Utility Point

Avro

Outfox The Market

Green

Orbit

Bristol Energy ( Together Energy)

Eon Next 1 and 2 year fix - No Exit Fees ( Direct from Eon Next Website best option for most people)

Go To Energy

Sainsburys Energy ( Eon Next)

Utility Warehouse

settosave

Can someone please confirm, the price cap increase for prepay customers is £153 a year right? Just confused as article on EDF price hike suggests price increase is only £53 but main article on Energy costs says £153..I think just mistake and is £153 but there's a big difference! Thanks

settosave

This is the bit of the article: 
If you're a prepay customer, the price will also rise on 1 October. Similarly, EDF's standard prepay tariff will rise from the current maximum allowed under the price cap to the new limit, from £1,256/yr now to £1,309/yr from October.