Martin Lewis: Energy price cap to rise by 51% on 1 April - should you fix now?

spot1034

Wholesale prices for the period beyond April are still falling - I see that today they're down to the 150p/160p per therm range. Where they will end up, who knows, but they are certainly moving in the right direction.

I'm becoming quite concerned by the advice that's being given which a) assumes the price cap will rise by 50% or more and b) that fixes on offer now might be worth snapping up even if they are at a considerable premium to the present cap. It might well be that  government intervention will limit the increase in the cap, and in the meantime lower wholesale prices will surely enable suppliers to offer more reasonably priced fixes than those presently on offer.

Of-course it remains a guessing game but surely the best advice at present is to continue to sit tight and await further developments.

Gerry1

JuMoon said:

I'm with Scottish Power, currently fixed until 28/2/22 on £14.27 and £2.60 Gas. Been offered 1 year fixed £28.07 Elec and £6.75 Gas

Welcome to the forum.  If those are your kWh rates, they're about a hundred times as much as other people are paying.

And make sure you never write a cheque ! 

jcontest

spot1034 said:

Wholesale prices for the period beyond April are still falling - I see that today they're down to the 150p/160p per therm range. Where they will end up, who knows, but they are certainly moving in the right direction.

I'm becoming quite concerned by the advice that's being given which a) assumes the price cap will rise by 50% or more and b) that fixes on offer now might be worth snapping up even if they are at a considerable premium to the present cap. It might well be that  government intervention will limit the increase in the cap, and in the meantime lower wholesale prices will surely enable suppliers to offer more reasonably priced fixes than those presently on offer.

Of-course it remains a guessing game but surely the best advice at present is to continue to sit tight and await further developments.

Even if prices go down by quite a bit, existing suppliers have been eating losses now for months and they will no doubt look to recover some of that.  The huge suppliers may sit on it for a LOT longer.  I think it's laugable for there to be complaints about the price cap increasing.  The cap needs to increase or suppliers will go under, why "consumers" shouldn't share in this pain is beyond me.

Saying that, Martin and others pushed for banks to refund PPI for people even when they had no valid claim (I would call that Fraud) so I guess the view is that as long as the masses are happy then all is well.

A big fear people should have is moving to the fixed rate deals now as from what I am hearing many are refusing to move people to SVT as an option.  It's a gamble really.  My fix is up 1st of march.

I don't think there will be any government intervention, the cap is going to move to a level that will let suppliers survive.  One would HOPE, that the limit might move back down next year if the markets stay stable.  Loss recovery is going to be the driver for the next year me thinks.

savers_united

jcontest said:

Even if prices go down by quite a bit, existing suppliers have been eating losses now for months and they will no doubt look to recover some of that.  The huge suppliers may sit on it for a LOT longer.  I think it's laugable for there to be complaints about the price cap increasing.  The cap needs to increase or suppliers will go under, why "consumers" shouldn't share in this pain is beyond me.

The suppliers who are left are pretty well hedged and have been compensated for customers they have taken on from failed suppliers. So they are only really taken losses on their existing customers who are on the capped SVT, each supplier will have different mix of fixed and SVT customers at any one time, alot of people are fixing again at higher rates, look around this forum and many are opting for the fix option and giving up the best part of 3 months (half) the capped October - April protection.

So it's going to be a mixed picture, if a supplier can secure a forward contract at a decent rate then I have no doubt they will offer it to their existing customers, and losses from the cap should be recouped as wholesale costs fall and the cap lags behind it, not everyone keeps a close eye on the market and will stay on the SVT even when better tariffs become available. 

bristolleedsfan

savers_united said:

jcontest said:

Even if prices go down by quite a bit, existing suppliers have been eating losses now for months and they will no doubt look to recover some of that.  The huge suppliers may sit on it for a LOT longer.  I think it's laugable for there to be complaints about the price cap increasing.  The cap needs to increase or suppliers will go under, why "consumers" shouldn't share in this pain is beyond me.

  alot of people are fixing again at higher rates, look around this forum and many are opting for the fix option and giving up the best part of 3 months (half) the capped October - April protection.. 

...............

evanowen

Martin's 'advice' has cost me dear, he said we should do nothing and go onto the SVR when our fixed deal ends, well Scottish Power offered me an exclusive deal with 18.8 standing charge and 21.396 unit cost fixed until April 2023. I didn't know what to do and spent days looking into it, then it vanished.... Thanks for nothing Martin Lewis!!! 

QrizB

evanowen said:

I didn't know what to do and spent days looking into it, then it vanished...

Yet this is the first time you''ve mentioned it on the forum. If you'd asked here, we'd have said "grab it with both hands".

meinnit

evanowen said:

Martin's 'advice' has cost me dear, he said we should do nothing and go onto the SVR when our fixed deal ends, well Scottish Power offered me an exclusive deal with 18.8 standing charge and 21.396 unit cost fixed until April 2023. I didn't know what to do and spent days looking into it, then it vanished.... Thanks for nothing Martin Lewis!!! 

When were you offered this?

ispookie666

The way things are going, people are in for an absolute shock when the new price cap is announced.  Too much geopolitical instability to push the gas prices down.  The UK is heavily reliant on gas for electricity production.   Ofgem has to recoup all the money which the surviving companies have had to spend on taking up customers. 

 Which every way you look, the only way is up!  I'm sitting tight.  

I’m currently with EON Next – 22.98p/12.04 with a standing charge of 22.95p/day  I'm on heating oil, that's another story

evanowen

meinnit said:

evanowen said:

Martin's 'advice' has cost me dear, he said we should do nothing and go onto the SVR when our fixed deal ends, well Scottish Power offered me an exclusive deal with 18.8 standing charge and 21.396 unit cost fixed until April 2023. I didn't know what to do and spent days looking into it, then it vanished.... Thanks for nothing Martin Lewis!!! 

When were you offered this?

Early December