Is it simply a gamble that did not pay off

savers_united

This may be hard to take for many who's supplier have folded and now face some serious price hikes, but is the reality that those who chose a fairly new less known supplier with often poor reviews and feedback understood there would be an increased risk they could run into financial problems and fold, that signing up to a tariff with far lower prices compared to the big six came at a risk. Yes there is an ofgem process in place to protect supply and find another supplier but when you enter into a fixed deal well below the other offerings you are gambling on the suppler staying in business for the long term. 
Its not like suppliers have not gone out of business before, it can and does happen.


Those who are naturally a bit more cautious about these things opt for a big name and pay that bit more to get security of supply and customer service (although not always the case), better IT systems, apps etc.

I am not knocking anyone's decsion here as quite often these things pay off and you save big, but from time to time they don't, and as much as I feel for those who are affected is it fair to those who took the more cautious approach and often paid more with a better known supplier should be asked to start paying more to cover this fallout from these insolvent businesses, if the cap is raised or scrapped or a levy applied it is going to effect millions who did not risk going with little known suppliers. 

There may not be another answer and it may be the only way to go, but those already on a capped variable should in my eyes be protected until April and through the winter months like any other fixed tariff.

If they push ahead with this then the cap going forward is worthless and may as well get scrapped. 

JJ_Egan

But the bigger names have never been immune .Sometimes these small or startups become much bigger .

Of course their may be an advantage in the so called big 6  being non British companies .

Armengar

you do realise that NO energy company can sustain the current prices?  Im with Avro I would have needed to switch in November.  Even with the (now) 2 months on SOLR I will still be better off than if I had gone with a "more established" company.

In the past I have had nPower (took them to small claims court and was successful over an incorrect MPAN that they would not change), ive been with Centrica (this didnt get to court, the ombudsman was good enough over failure to use a correct starting value for my gas despite the value used being WAY above the final bill and an independent reader).

Avro?  No problems at all for 2 years running.  At the end of the day Avro had a license, they didnt have large enough reserves to weather the storm.  I very much doubt they will be the last.  Certainly Bulb are teetering and they dont seem to have a reputation as a shady company.

jimjames

I agree and took that "risk" fully aware. In reality though there is no risk as your energy supply is guaranteed, it's just the price that may rise. I've switched annually and used many of the small suppliers. Mine hasn't gone bust (yet) but I expect that it will do and I'll be transferred. It's not on the same scale of gamble as those that put their savings with the likes of London Capital & Finance

Liku

For me while it is a bit of a gamble, that credit is protected makes it less of one. Like a lot of things it is a bigger gamble if you are short on money so any sudden increase will hit you badly. 
But few could have predicted what is happening now. For some perhaps it wasn't worth it in the end.

My mum was with npower for years and I can tell you that I'd never, ever want to deal with them. Way worse than the 'cowboys' I have been with! Sure the ones I used took forever to respond but better than making some serious mistakes like npower did. One day she'd be told it was £150 and the next that was wrong and it should be £50 (made up numbers but it was that bad)

[Deleted User]

If the Cap is left as it is then more suppliers will fail. More failures mean greater costs will be passed onto Ofgem and, in turn, consumers. The Cap in April is already forecast to be c.15% higher and as gas prices are still rising.  April is already the month when higher NI kicks in and we can expect large Council Tax rises to cover social care. Not a good move politically with May local elections. 

In truth, there is no easy solution. It is either pay more now or later. The Government could drop VAT and it could give suppliers temporary relief from green levies. The latter doesn’t sit well with the Government’s green agenda and COP26.

chewyluis

Yes well I always chose tariffs that cost a few quid more with a bigger supplier versus the absolute best price I could get with the smaller unknown operators.

That said, I'm aware many of the customers facing this problem now are the least able to afford it. I'm also sure most of them were not aware they were playing a game of risk. They just did what they do for everything else try to get the best price to help them make ends meet. I'm sure they were even advised to exactly what they did by the likes of Citizens Advice and government messaging around the energy market. The government have played a big role in feeding this monster.

danlightbulb

The 'big 6' have just as bad service ratings as any other supplier. They are all just call centres and ran for shareholder profits, all the same.

How do you know that in paying more for security you aren't just paying far more than you need to to line a whale's pockets?

The issue here really has been the wholesale market. Consumers and suppliers should reasonably expect a relatively stable wholesale market because its a national infrastructure issue and highly regulated sector - that hasn't happened because of massive regulatory/political failure in this area.

Now instead of the government and regulators, its the 'cowboy' retailers that are getting the blame, and - even worse - people are blaming everyday consumers for choosing poorly. That is very poor form in my opinion - as if we as consumers should be expected to prop up big suppliers just for the sake of it. Anyone with this high and mighty view should be ashamed of yourself.

savers_united

I understand the risks are low and supply is secure. The point I was trying to make is that many are now being moved to a higher tariff with SOLR, there seems to be alot of disgruntled posters on here stating their current tariff should be honoured by the SOLR and basically the big price hike needs to be addressed. That is the risk I was referring to, you go with a cheap provider but if they go pop you get moved to a SVR or similar with SOLR, when you could of fixed at a lower price a couple of months back with a better known more secure supplier, ultimately for many it's going to cost them more now having gone with a cheap fix that has not worked out.

The big players in the market buy forward supply, so all the current customers they have are not loss making, its the million customers who have been moved to a SOLR who will be loss making, the SOLR would not have purchased enough forward supply to cover that amount of new customers, and may need to buy a proportion of the energy on the current wholesale market.

The most secure suppliers are those who not only supply energy but also generate it as well, they are all weather businesses. 

JGB1955

I've signed up with Sainsbury's (v18) and that's currently £200+ p.a. under the cap... fixed for 2 years.  I DO wonder when we're actually going to have to bite the bullet and pay for what we *really" use?  I last paid £110 per month back in 2013... we've had it 'cheap' ever since then.  I fully support wind/wave/sustainable power.... but if the wind doesn't blow, or the waves wave....?

phillw

savers_united said:

That is the risk I was referring to, you go with a cheap provider but if they go pop you get moved to a SVR or similar with SOLR, when you could of fixed at a lower price a couple of months back with a better known more secure supplier, ultimately for many it's going to cost them more now having gone with a cheap fix that has not worked out.
 

If you got a long cheap fix from someone like British Gas then you're laughing, as most of their customers have been paying >£300 a year too much for years.

Anyone with lots of people on cheap tariffs isn't secure. All the suppliers buy energy in advance, but that price is much higher now & they can't just stop buying it and hope that the price will drop.