Martin Lewis: The rise in the energy price cap next April will still be cheaper than any fixed deal

fireice

Astria said:

"Will LIKELY still be cheaper"

In other words, like every other news story and "expert", they don't know and realistically, can't know.

I'd put it more like: If you want a guarantee how much you will be paying for your energy then move onto a fixed deal, but notice that there's a good chance you'll end up paying more as a result!

There are hundreds of thousands of people who did exactly this to protect against price rises, some of who will have only been a couple of months into a 2 year fix. Their fix was meant to guarantee how they were paying for their energy but now it's basically null and void and now they've been put on the price cap.

I sign up to a contract (not just energy but broadband, phone, gym) I'm expected to fulfill my side of the contract yet these energy companies renege their side by calling it quits.

QrizB

fireice said:

I sign up to a contract (not just energy but broadband, phone, gym) I'm expected to fulfill my side of the contract yet these energy companies renege their side by calling it quits.

This take is wrong in so many different ways ...

wittynamegoeshere

I'd agree with the fact that it's a one-sided bet, many people voluntarily paid extra on their bills over the previous months to ensure they got a got a fixed rate through this winter.  But their supplier has gone bust, they're transferred onto the maximum capped rate (or even more if they get misled into getting an overpriced fix).  But they do not get any of the extra they paid back, basically you're paying for insurance but when it's the time to claim on the policy they do a runner, taking the money you paid with them.

Basically any energy supplier can choose whether to remain in business or not.  If they're winning the bet they carry on, if not then they pull the plug - often after extracting vast amounts in salaries, bonuses, consultancy fees etc.  Those at the top of the pyramid never lose.

Betting against another party who can leave the deal at any time without penalty is unlikely to be beneficial.

wild666

I believe there will be another low prices era but the savings will not be as big as what they quoted before, the savings will be more like £100 to £125 per year, £1.92 to £2.40 per week, maybe even less. No energy firm is going to claim £300 plus savings unless they are using some of the crazy rates some suppliers are charging to compare against.

What seemed to be the factor before was lower SC's with a slight kWh price drop by some or large when the prices weren't that high. IMO the SC should be standard across all suppliers i.e. once price and only the kWh prices can be altered. If the SC is a fee towards the supply chain then IMO that would mean that a set price for the SC is paid no matter who supplies the energy.  

Astria

wild666 said:

What seemed to be the factor before was lower SC's with a slight kWh price drop by some or large when the prices weren't that high. IMO the SC should be standard across all suppliers i.e. once price and only the kWh prices can be altered. If the SC is a fee towards the supply chain then IMO that would mean that a set price for the SC is paid no matter who supplies the energy.  

You do that and I wouldn't be surprised if the differences between suppliers is more like £50 as they'll all go for more or less the same rates. Newer companies will offer lower slightly kWh prices than the big six just to try and get people onto the books.

What we have now works - if you are a big user you go for a higher SC with lower unit cost, but if you are a low user you'll go for a lower SC with a higher unit cost. End result is pretty much the same unless you guess in the wrong direction and that's when the energy company wins (well, they win all the time anyway, but you get the idea)

merchcon55

A few months ago I came across some old gas and electricity bills I had filed away - something like 2002. Back then instead of a standing charge, the first say for example 100 Kwh of Electricity used each month were charged at a much higher rate than the units after the first 100.

I'm not sure which is really a better system - I had just not remembered that there was a higher rate/ lower rate split instead of daily standing charge.

In New York City, where in many apartments where heat is included in your rent, the only natural gas you use is for cooking - hobs and oven. You pay for a minimum usage of 3 Therm a month. Especially during the summer months, my mum does not even use this minimum. It's essentially a standing charge, just expressed in a different way.

wittynamegoeshere

I remember the differing rates tariffs too, it was utter nonsense as almost nobody used less than the number of units that were at the higher rate so it was a standing charge in all but name.

I agree with the above, that if we had either a standard fixed standing charge (or zero) then people would be able to actually shop around.

There are countless threads where people quantify their usage only by the direct debit they pay, most people do not have a clue what their actual tariff is.  The energy companies put up all this smoke and mirrors precisely to discourage price comparisons against others.

Imagine going to Tesco and seeing that the tins of beans are priced at "£xx per annum based on typical consumption", and you don't find out what you're going to pay until you take them to the till.

I'd love there to be a day when energy companies stated their rates on billboards.  Survival of the fittest, exactly what competition should look like.  I doubt it will ever happen, clearly the country is not run for the benefit of the population, but is run to enable mega-companies to extract as much money as possible from the people, hopefully without them realising they're being conned.

samlad80

Hi Martin and Gang,

i had a lovely email from British Gas today telling me to fix NOW!! To a wonderful tariff especially for people moved to them following an energy company collapse. 

The comparisons they have given me show that switching now will mean my bills rise on average £100 a month starting from the switch - yet they make out they are doing me a favour. 

Now, should I start paying more now or stay on the capped tariff until April, and in April - are they then going to offer me a horrendous tariff that’s even worse  

help!

wakeupalarm

Martin Lewis could be wrong based on the latest predictions of over £900 increase.
Those fixed rates may be appealing after all.

https://www.itv.com/news/2021-12-09/household-energy-bills-set-to-rise-by-up-to-900-a-year-in-april

Effician

wakeupalarm said:

Martin Lewis could be wrong based on the latest predictions of over £900 increase.
Those fixed rates may be appealing after all.

https://www.itv.com/news/2021-12-09/household-energy-bills-set-to-rise-by-up-to-900-a-year-in-april

You need to re-read the link you posted. £900 does not relate to cap rate rise