Is it simply a gamble that did not pay off

[Deleted User]

I am not an industry expert and don't intend to be and when I see a price that is in what I assumed to be an open market in the UK that will save me 270 quid on the big name I was with, I will switch.
No idea what will happen now but perhaps a better description of the business when they are getting cheap deals and a risk factor for the uninformed like me.
But 270 saved a year and limited funds, that is a big deal for me. I can weather this (the extra it will cost), what with other problems at the mo, how many are deciding what they must cut out this winter.

btr30

I used to be an advocate of big 6, but over the last 5 years or so I have gone with whoever was cheapest at time of renewal, all small firms and I am now being placed with EDF ( my last big 6 supplier) following the demise of Utility Point nine months into a twelve month contract.
I reckon I will have saved around £1,000 with this strategy, so if it was a gamble I still think it was right for me.

jimjames

savers_united said:

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.

It would be an interesting calculation. I suspect that switching was probably beneficial overall regardless. £300 per year saving over 10+ years vs increased bills for a few months to a year. You'd have also been paying over the odds for the fix initially which might not be much better deal than the current cap.

But I agree it shouldn't be the rest of the market that has to pick up those costs. It's criminal that companies like Avro can make year on year losses, use customer balances to boost their balance sheets to stay afloat and then get those losses covered by the SoLR that picks up the pieces or by levies on everyone else.

[Deleted User]

When I first read this I was going to write about how those little suppliers have saved me a fortune over the last few years and even if my current suppliers go bust I'd still ultimately have saved money in the long run and hail "long live the small cheap supplier" - but I deleted it and started again.

I am affected to some extent but won't lose financially. I'm going to have to wait a long time for my £840 credit to come back from Green, but I'm fortunate enough that I won't miss that money even if it takes a year to come back, and again I was fortunate enough to have £2k spare in January to make an instant £200 profit for stumping that money up front. I was also fortunate enough to leave Green in August and fix a good deal elsewhere before all this blew up.

But all that sounds rather smug, for many that will become a struggle to put food on the table.

I do look at the social aspects of this - apparently a third of people have never switched suppliers, more are unsure as to whether they are on the cheapest tariff and only 15% of customers have heard of the price cap and understand it.

Having a free market is great when there is a real differentiation in the end product or service, it accelerates innovation and gives choice, but given the end product is the same and satisfaction with customer service appears to be about the same, if not better for the small tier suppliers, we don't really have a free market, we just have a stock market where it is just about the numbers and sadly it is for an essential product, not a luxury item.

The sad thing is that I'd guess the most disadvantaged and vulnerable people in society are those on the higher tariffs. People with financial difficulties can't take advantage of the best tariffs or switch as easily. People without the mathematical skills to properly compare tariffs don't know what they are buying - eg the all too common complaints on this website of "I'm on a fixed tariff - why have they increased my direct debit" or "My friend in a 5 bed detached pays £60 per month why is my one bed flat £150 per month".

I worked for one of the Big 6 for 11 years, mostly prior to the introduction of competition, I worked on the prepayment meter department for a time (some were still token meters back then) and regularly heard of the hardship cause by 'fuel poverty'. These customers were paying the highest tariffs while the more affluent people were paying lower tariffs and saving hundreds by paying several years energy up front to avoid the newly introduced VAT for example.

Yet I look at petrol / diesel prices, virtually the same (give or take 10%) throughout the country (except say motorway services) - nearly anybody can access supermarket fuel with no catches and no complications - but some people will be paying double for their gas this winter.

So I agree, it is all an absolute mess, but I'm still going to surf the cheapest deals because I have little to lose and a lot to gain from doing it - but it does stink.

Thrilled

Gambles are made with explicit odds, company directors bleeding a company dry as the market shifts in an unfavourable direction is more in the realms of borderline criminal and a regulatory failure.

alsa1

But we are told do the same, generally speaking, with shopping around for our home/car insurance. Don’t renew, shop around etc

I don’t remember there being any disclaimers before signing up, that you are at risk if an insurer goes under, or anything to warn energy consumers that they should do checks over utility companies. One would expect the regulation would exist that suppliers would be required to have sufficient capital or backing.

phillw

[Deleted User] said:

Having a free market is great when there is a real differentiation in the end product or service, it accelerates innovation and gives choice, but given the end product is the same and satisfaction with customer service appears to be about the same, if not better for the small tier suppliers, we don't really have a free market, we just have a stock market where it is just about the numbers and sadly it is for an essential product, not a luxury item.

It's both. Because of competition the companies have to try to streamline the business, for better or worse. They also have to be good at buying energy ahead of time and figuring out how much money they need to charge customers to stay in business.

It's not unlike how insurance companies work, the customer facing part of the service varies a little bit and as long as the claims get paid then we have no interest in how they make enough money to pay our claim.

johnbhoy70

I kinda agree with the OP to be honest. Was with Avro there for 3 years but it's only the second time in 25 odd years of shopping about i've moved from the big boys. The only other time was with the Co-op when they entered the market a good few years back and it was a bit of a disaster to be honest and i bailed sharpish. From memory, the savings must have been pretty decent as i wouldn't have strayed from the ''relative'' security otherwise.

t1redmonkey

I'm just cursing my luck really.  Always gone with 'bigger' suppliers in the past, probably the least well known one I've ever used was Shell.  Decided to try a small supplier (Avro) for the first time a few weeks ago as my fixed term was ending, supply started 21st September, then they went bust 1 day later!  

hillcats

I’ve skipped around the small suppliers for absolutely years and years and would estimate that I’ve saved a hell of a lot of money during that time.
Of course you get the odd bad apple with poor communication but overall I've done alright out of it. I regularly check to ensure I’m on best tariff and switch if needed, usually before the supplier has collapsed.  

I’ve now been caught twice as when ‘Better Energy’ stopped trading they moved me to PFP who honoured and then renewed at super cheap prices, but alas PFP have now dropped, but even then I’ve been lucky enough to have enjoyed 22 months of cheap fuel on 24 month tie in. 

It is what it is… yeah I have credit tied up with PFP (now British Gas as SOLR) but luckily it won’t affect me.  

A few higher months is bad luck, and part of the gamble… I know I’ll get the money just when, nobody knows!! 

I get back to the search for decent fuel prices… although I’m aware it may take somewhat longer this time.