Energy price cap freeze on a fixed tariff

phillw

brewerdave said:
But the difference here ,is that a price cap freeze by HMG overruling OFGEM at almost the last moment, would be effectively retrospective legislation. Wouldn't expect to get the difference back from date of fix til the point of "cap freeze" but would expect exit fees to be waived. . 

Do the T&C say they will be?

Taking a fixed rate vs variable rate is a gamble, you can't make a bet and then be let off when you lose.

phillw

Deleted_User said:
Those who paid above April's cap were doing it to protect themselves against a potential October rise.

And those who didn't take out a fix, were gambling that something else would be done.

You gambled that they wouldn't. You've still got the same guarantee you had before, so you can plan your finances. Those on variable tariffs do not.

At this point Liz Truss has not even announced whether something will be done, let alone what it is.

What you are feeling is FOMO.

phillw

pedrodelgado said:

he also very recently advised people to pay a bit more for a month or two, in order to be paying less for the other 10 months.

Can you point out where he has advised anyone to fix their energy bills in the last six months?

https://web.archive.org/web/20220712035151/https://www.moneysavingexpert.com/utilities/-are-there-any-cheap--fixed-energy-deals-currently-worth-it--/

3. Yet there are fixes cheaper than the predicted October cap

So let's get to the nub of this. This is about whether there's a deal likely to be cheaper than the price cap if we look over the next year. For that, clearly there need to be fixes you can lock into that are cheaper than the expected October price cap. And there are.

So if we factor in three months on the current rate, three at October's, three at January's and three at April's, and adjust for higher use in the winter, if the predictions are right, on average you'll pay 57% more over the next year than you do now. Of course, some of this is crystal-ball gazing and averaging, but overall my best guess, as a rule of thumb, is...

If you're offered a year's fix at no more than 55% above your current price-capped tariff, or 60% more if you very strongly value budgeting certainty, it's worth considering.

This isn't an exact science – do watch my video explainer from a couple of months ago if you want to understand more. Fixing below this point is still not a slam dunk, I can't promise I've got this right, there are too many unknowns, just that this is my best-guess with the information I have at the moment.

CheekyMikey

Quite a number of people have fixed within the last month ABOVE the Oct cap purely because of the predictions from Cornwall Insights for Jan23 and Apr23 and the belief (reinforced by financial commentators including Martin) that these predictions are likely to be very accurate and that fixing ought to be very seriously considered. It was thought very unlikely that a price freeze might happen. Now, I realise that predictions are just that and not set in stone and there are never any guarantees, and that there was never any direct recommendation that people absolutely should fix, but the tone implied if you could afford the higher payments from Oct-Dec, then benefits would be seen next year. I don’t think people who took that onboard and tried to prudently plan their energy expenditure should be penalised and so I’d hope exit fees will be waived for all fixed contracts. I think a price freeze will have to extend beyond 4 months as this gives no certainty at all to anyone, be they on svt, fixed, individuals or businesses. Personally I think a 12 month cap around £2700 is the best compromise between helping people, trying to lower usage and not loading the country with massive debt.

spot1034

scobie said:

MWT said:

scobie said:

I emailed Eonnext re this just now.  I fixed on their v20 12 month deal a week or so ago.  I asked if it was possible to move back to Next Flex if I wanted.  The reply can through just ten minutes later that it would be no issue and no exit fees.  

I’m pretty confident all the major suppliers would be the same.  

If it was only 'a week or so' since you went on to the fix then you are still in the 14 day period when you can change your mind with no consequences, so yes, all suppliers will be the same, if you are within the 14 day cool off period...

Not quite the same as thousands of people who fixed months ago calling the day they announce whatever they are going to announce...

Ok. I was trying to keep my note short and concise but as you bring up the issue let me elaborate. 

I told them I was within 14 day period but would likely not decide until the picture is clearer, and that would take me outside the 14 day period.  

They said no issue.  The deal is no exit fees. 

The main reason I posted is because some are speculating that it might be hard to move from fixed to Variable, instead of fix to new fix.   That was the reason I emailed them.  

And it seems it is not an issue. 

The point I was trying to make was simply about the logistics. It could be that everyone who has taken a fixed deal over the past four or five months will be trying to contact their supplier within the space of four or five days, and it might be a struggle for them to cope with the volume of work.

pedrodelgado

scobie said:

MWT said:

scobie said:

I emailed Eonnext re this just now.  I fixed on their v20 12 month deal a week or so ago.  I asked if it was possible to move back to Next Flex if I wanted.  The reply can through just ten minutes later that it would be no issue and no exit fees.  

I’m pretty confident all the major suppliers would be the same.  

If it was only 'a week or so' since you went on to the fix then you are still in the 14 day period when you can change your mind with no consequences, so yes, all suppliers will be the same, if you are within the 14 day cool off period...

Not quite the same as thousands of people who fixed months ago calling the day they announce whatever they are going to announce...

Ok. I was trying to keep my note short and concise but as you bring up the issue let me elaborate. 

I told them I was within 14 day period but would likely not decide until the picture is clearer, and that would take me outside the 14 day period.  

They said no issue.  The deal is no exit fees. 

The main reason I posted is because some are speculating that it might be hard to move from fixed to Variable, instead of fix to new fix.   That was the reason I emailed them.  

And it seems it is not an issue. 

With e on next but other suppliers will be different. 

isasmurf

Inigo_Montoya said:

Personally I currently only have fixes on the electricity with a £100 penalty exit fee - if I have to get out of these fixes then I will at least be phoning British Gas to see if they will waive the fee given the unusual & extenuating circumstances but am not expecting them to agree to this

Check the terms of your tariff. BG do not usually charge exit fees if you switch to another tariff with them during the term. Usually they only charge the fees if you move to another supplier. 

michaels

It seems any cap on the cap will be paid for by a loan paid back over some as yet defined long term.

What if those on a fix are deemed not to be taking the loan during the period when they are on their fix rather than the subsidised cap so don't have to pay the part they do not drawdown whilst on the fix?

Probably complicated, especially with home movers, but I think pretty fair.

Opt out of the fix and back onto the subsidised cap or the fix ends and back onto the cap and you get the subsidy loan and have to pay it back later.

phillw

CheekyMikey said:

but the tone implied if you could afford the higher payments from Oct-Dec, then benefits would be seen next year.

You would have certainty, there are various predictions about what could happen with energy prices in 2023. Which all require predicting what will happen in the war between Russia and Ukraine.

Would you ask for your exit fees to be waived and a refund of the extra you spent on fuel, if Russia surrenders and gas prices collapse?

It was never about whether you could afford the higher payments, but how you evaluate risk. How messed up would it be, if it was about whether you could afford the higher payments this year?

pedrodelgado

The_Green_Hornet said:

It shouldn't be long now before we start seeing newspaper articles claiming it is a regressive policy where a multimillionaire will get exactly the same level of protection as everybody else.

They won't be wrong.

Why is that wrong? If I were a millionaire I'd expect to be charged the same amount to buy a loaf of bread, as someone earning minimum wage. It's called being fair. Just because you can afford to pay why should you have to pay more? Are we really in a society where just because you've worked hard and made something of your life, you have to subsidize lazy layabouts ?