Opposition proposals to freeze the price cap - fair for people who have fixed?

Ultrasonic

mark_cycling00 said:

funny.money said:

mark_cycling00 said:

When you got your fix, you never considered how unfair it was on the 80% of the population who are unable to get a fix and will forever be stuck on variable rates?

How do you arrive at 80%?

A website called MoneySavingExpert. My memory wasn't perfect - it's 70%

"The energy price cap limits what firms can charge in England, Scotland and Wales for their default standard variable tariffs. It currently changes every six months, though that'll soon be every three. The vast majority of homes, over 70%, are now on it – pretty much everyone who isn't on a fix."

The link you've provided doesn't include your quote. When any such figure was calculated will be very important as I'm certain the number of people taking out fixed contracts has been increasing recently.

Bielsa19

[Deleted User] said:

tc66_2 said:

Am I right in saying that for certain fixes (Eon Next springs to mind), you are able to go back to the variable tariff with no penalties or exit fees?

Yes, with Eon Next I've signed up on v18 commencing 1st October 2022.  If I revert to another deal (or a reversion back to SVT) that they are able to offer then yes, no exit fees.  At least that is my understanding should this unlikely scenario become reality - I'm sure we will all know in early September prior to the next Cap rates kicking in.  It would mean that Ofgem role in the energy regulation business is somewhat neutered (some/many might think this is a good thing)!

Re if it is fair for those that have fixed (and are already paying elevated prices compared to say the current cap), you would probably be better off paying any exit fees and reverting to SVT (were it to stick at the April 2020 level). 

Thinking of switching to this. If you don't mind me asking,  how did you manage to push the start date back to the 1st October? It feels a bit "have cake and eat it" -  apologies if that comes across as envious,  it's just that I am quite envious! 

Section62

JIL said:

Best have a word with Martin Lewis as he is horrified by the huge profits made by British gas, and whilst this is mostly energy production, it's still British gas. 

If that really is what he's saying then he's doing the public a disservice by confusing them.

The large profit was made by a company called 'Centrica'.  Which happens to own the British Gas retail brand as well, but isn't "British gas".

If he's "horrified" by the profit made by Centrica then that would imply that he doesn't understand the difference between retail energy suppliers and the companies responsible for energy production.  Which seems unlikely, but if what you say is true it suggests he may not be the 'expert' that he is claimed to be.

The logical conclusion of your (/Martin's) concern is that any company involved in retail energy supply should divest any other activites (such as generation or extraction) which risk them making a 'huge profit' and being criticised for something which is largely out of their control.  This would be unfortunate though as we need more investment in extraction and generation, not less.

Equally, I wonder whether you (/Martin) were "horrified" by the huge losses made by Centrica a couple of years ago?

Astria

Bielsa19 said:

DerwentMailman said:

tc66_2 said:

Am I right in saying that for certain fixes (Eon Next springs to mind), you are able to go back to the variable tariff with no penalties or exit fees?

Yes, with Eon Next I've signed up on v18 commencing 1st October 2022.  If I revert to another deal (or a reversion back to SVT) that they are able to offer then yes, no exit fees.  At least that is my understanding should this unlikely scenario become reality - I'm sure we will all know in early September prior to the next Cap rates kicking in.  It would mean that Ofgem role in the energy regulation business is somewhat neutered (some/many might think this is a good thing)!

Re if it is fair for those that have fixed (and are already paying elevated prices compared to say the current cap), you would probably be better off paying any exit fees and reverting to SVT (were it to stick at the April 2020 level). 

Thinking of switching to this. If you don't mind me asking,  how did you manage to push the start date back to the 1st October? It feels a bit "have cake and eat it" -  apologies if that comes across as envious,  it's just that I am quite envious! 

Simply speak to customer service, you might or might not get it. Typically they only allow you to push the date of a new tariff back 30 days (so 14th September) - but you could drop onto an advisor which will offer more, but no guarantees.

spot1034

The problems that would arise regarding people who have 'done the right thing' and fixed, perhaps with a short term extra cost will be made clear to government by civil servants and perhaps Ofgem, and I expect Martin Lewis will be asked to comment at some point.

The biggest downside with this that I can see is that this is effectively a very expensive policy, costed for a limited period but with every likelihood that it would have to be extended not just once but a number of times, thus massively inflating the already massive cost.

Ultrasonic

Personally I think if the price cap were to be artificially limited it would make most sense to do so at the £2800 (IIRC) level that the current government support package was predicated on, and for this to go ahead as planned.

EssexHebridean

Ultrasonic said:

macman said:

if you've recently switched to an (expensive) fix, you've not done it just because you thought it was still the cheapest option. You've done it because you wanted certainty of pricing for the next year, or whatever period you've locked into. Even if prices fall, you've still got that certainty. 
What you buy with a fix is essentially an insurance policy.

Whilst I'm sure this is true for some it definitely isn't true for all. My personal choice to take out fixed tariff contracts has always been about trying to save money.

I agree with the concerns raised at the start of this thread and have mentioned them myself in other thread previously. I really want to see a journalist raise this with Sir Kier Starmer and see what he has to say on the subject.

As well as the exit fee issue, I'm not sure the current terms of all fixed tariffs allow for customers to revert to the SVT with the same company, as opposed to the contract being ended by the customer transferring to a different supplier. Although possibly some of the experts here know if this must be an option?

Completely agree with this - the only "certainty" I was looking for was that come October I would be saving money over staying on the variable. Had I been that risk averse and minded towards certainty over pricing I would have been on a fix far sooner. 

If any plan to freeze the cap as per the existing level was to be done, it would need to be done hand-in-hand with actually getting the energy suppliers to agree to accept new customers to the SVR, rather than currently where only a tiny number are willing to do this.

Ultrasonic

In terms of the proportion of people on fixed tariffs, I've just remembered the poll below from July. Importantly this only tells us about those who chose to vote in the poll rather than the whole population but for what it's worth this showed about 70% of respondents were on FIXED tariffs rather than the majority being on the SVT.

Are you on the energy price cap or have you fixed? (moneysavingexpert.com)

savers_united

As much as I don't like interference with the energy market I feel that something will need to give this winter. 
A new PM coming in with an opposition having a costed way of avoiding carnage for alot of people is going to be hard to avoid taking seriously.
Like I say I personally don't like the idea of politicians getting involved, but the situation is getting quite serious and for people to see energy companies (not necessarily suppliers) making these large profits I think Gov't will need to act.

As far as those who have fixed then its always a gamble you take, a few have been on here saying they are good for the next 2 years, you always have the option to leave and jump back onto the SVT if it works out cheaper, although labour's suggestion is a freeze for 6 months, so you would need to work out if sticking to a fix over the longer term is better.
Final point, those on a cheap fix in band D and below have received a CT rebate, and in line for a £400 Gov't grant, do you think that is fair when someone on a SVT may be facing a energy rate 40-70% more?? Its like all polictical decisions / budgets there are winners and losers. 

What_time_is_it

Having recently signed up to supplier who don't offer SVT (Green Energy) would I be able to switch to another supplier if I wanted to? Or are we potentially facing a situation where we are all "locked in" with our current providers?