What rates are you being offered by your provider at the moment?

mmmmikey

Hi - the answer is simple but not very helpful. You need to wait a few days and see where this actually all lands because the detail hasn't been communicated yet (maybe because it hasn't been worked out). Once you've got the detail of what you'll pay on your existing fix after any government rebate is applied you'll be able to make a considered decision. There are conflicting views on what is fair, what the current information means and what is likely to happen that is being discussed animatedly in other threads, so unfortunately reference to those isn't going to help much.

[Deleted User]

Telegraph_Sam said:

I'll be interested to hear the answer to that not least since it should clarify whether it is the overall 2.5 K spend OR the individual unit prices that are capped. In plain language not political-speak. "Typical use" strikes me as an example of the latter with umpteen different interpretations and wiggle room to spare.

That shouldn’t need clarifying.  It’s unit prices.

It’s not an all-you-can-eat buffet with the government paying for unlimited use.

[Deleted User]

stphnstevey said:

Currently on Fix Again 1 Year v10 till 12OCT22 at Electricity unit rate

19.82p per kWh, Electricity standing charge

15.62p per day, Gas unit rate 3.96p per kWh, Gas standing charge 17.63p per day.

There offering me Next Flex (Our flexible tariff, where prices can go up or down with the wholesale market)

Can someone explain what the new price cap means to me now please? Do I need to do anything? Should I switch early or stay on fix for long as possible?

Thanks

Stay on that fix until it expires.

When it ends on 12 Oct, you will then pay about 34p per kWh for electricity and about 10.3p per kWh for gas.

Spoonie_Turtle

Telegraph_Sam said:

I'll be interested to hear the answer to that not least since it should clarify whether it is the overall 2.5 K spend OR the individual unit prices that are capped. In plain language not political-speak. "Typical use" strikes me as an example of the latter with umpteen different interpretations and wiggle room to spare.

As explained twice on this page of the thread alone, it's not a cap on overall spend but on unit rates.

Here, official confirmation:  https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022

If you’re on a standard variable tariff

The average unit price for dual fuel customers paying by direct debit will be limited to 34.0p/kWh for electricity and 10.3p/kWh for gas, inclusive of VAT, from 1 October.

…

If you’re on a fixed tariff

If you’re on a fixed tariff at a higher rate caused by recent energy price rises, your unit prices will be reduced by 17p/kWh for electricity and 4.2p/kWh for gas.

…

Standing charges

Average standing charges will remain in line with the levels set by Ofgem for the default tariff cap from 1 October, at 46p per day for electricity and 28p per day for gas, for a typical dual fuel customer paying by direct debit.

The wording of "typical" refers to usage of 12,000kWh gas and 2,900kWh electricity, and is a regional average across the country.  Electricity standing charges particularly vary wildly by region, but there is also some difference between regions for gas and electricity unit rates as well.  So nobody yet knows what exactly their standing charges or unit rates will be, as that actually needs to be worked out.  That's one area of uncertainty.

[The wording in the fixed tariff section has caused more confusion than if they'd not said anything, because there is no detail about what counts as 'a higher rate caused by recent energy prices', and not everyone can believe that there will be a blanket reduction which would take a lot of fixes below the government cap.]

But one thing that is certain is it's not a case of using however much energy you like and only having to pay £2,500 for it!  It applies to unit rates, not overall spend.

Telegraph_Sam

Great. It should be shouted from the roof tops that the 2.5 K is (almost) irrelevant. Next question which might be apparent from the various sources: If my unit rates. fixed, capped or flexible, are different from yours (ditto our consumptions) does the "2.5 cap" on unit prices affect us differently? There could for example be one universal max figure for a kWh of electricity, OR the system could take what you or I am paying per kWh now as a reference / base point for future adjustments.
Could the situation arise where an existing fixed rate tariff is actually increased rather than reduced?

[Deleted User]

Telegraph_Sam said:

If my unit rates. fixed, capped or flexible, are different from yours (ditto our consumptions) does the "2.5 cap" on unit prices affect us differently? There could for example be one universal max figure for a kWh of electricity, OR the system could take what you or I am paying per kWh now as a reference / base point for future adjustments.

Consumption - no.  Unit price, yes.  There's an odd grey area still that we don't know about, but the general rule is if you are on variable, your rate will be about 34p electric and about 10.3p gas from 1 Oct, and if you are on a fix which was "affected by the recent higher prices", your rate will be todays rate minus 17p for electric and todays rate minus 4.2p for gas.

We don't know how that odd wording is going to be translated into reality, and we don't know if there will be a cap on how low a fix can be discounted to.

Telegraph_Sam said:

Could the situation arise where an existing fixed rate tariff is actually increased rather than reduced?

We don't think so, but there might be some unusual arrangement that we haven't considered.
 

QrizB

Telegraph_Sam said:

Great. It should be shouted from the roof tops that the 2.5 K is (almost) irrelevant.

There's a link to an explainer for the October Ofgem cap in my signature (this link). We're expecting the new Energy Price guarantee to simply reduce those prices, by around 17p/kWh for electricity and 4.2p/kWh for gas.

This is only what we're expecting; official details remain scanty.

Spoonie_Turtle

Telegraph_Sam said:

Could the situation arise where an existing fixed rate tariff is actually increased rather than reduced?

From the information available so far, No, definitely not.  If someone's current fix is below the government mandated cap for their region, it won't be affected at all.

Next question which might be apparent from the various sources: If my unit rates. fixed, capped or flexible, are different from yours (ditto our consumptions) does the "2.5 cap" on unit prices affect us differently? There could for example be one universal max figure for a kWh of electricity, OR the system could take what you or I am paying per kWh now as a reference / base point for future adjustments.

For people on the standard variable tariffs, it seems quite clear the change from October will affect everyone in the same region with the same supplier equally in that they'll all have the same unit rates - just like the standard variable tariffs work already.  What isn't entirely clear yet is people on fixed tariffs; the wording so far sounds like it may make adjustments based on the agreed fix rate, but that doesn't entirely seem to make sense.  We just don't know for certain yet.

In terms of usage, yes even the government page shows it will affect people differently by different usage, just like the Ofgem 'caps' currently - they are a national average and based on a very specific "typical use" so virtually nobody in the country will actually pay the exact amount of the cap.

With the government-subsidsed cap, the table makes it appear that people who use more will "save" more compared with the October Ofgem cap, BUT they will pay more than those with lower usage anyway, as is always the case with any energy tariff.  And despite the "saving" bills will still be higher than last year, because the rates are still higher than last year, just not as much higher as they would have been without government intervention.

Keith_F

mmmmikey said:

Hi - the answer is simple but not very helpful. You need to wait a few days and see where this actually all lands because the detail hasn't been communicated yet (maybe because it hasn't been worked out). Once you've got the detail of what you'll pay on your existing fix after any government rebate is applied you'll be able to make a considered decision. There are conflicting views on what is fair, what the current information means and what is likely to happen that is being discussed animatedly in other threads, so unfortunately reference to those isn't going to help much.

Exactly.
This from Octopus.

stuarta99

So what's everybody's thoughts for those of us that fixed, particularly the EDF one back in May.

From what I can see the fix is still slightly better for gas prices, but we are paying a couple of pence more per unit and about 6 pence more for the standing charge