Energy price cap freeze on a fixed tariff

jimexbox

Paid for through borrowing, not extra on bills. 

jak22

A discount to around £400 above April and keeping the £400 for everyone gets closer to April prices for those on the cap but helps fixed too.

The next question is whether that rebate for all continues next year and the discount vastly increases if the cap rises and the rebate ends.

sienew

jimexbox said:

Paid for through borrowing, not extra on bills. 

There are still conflicting reports on how it'll be funded.

Although borrowing or extra on bills doesn't really matter, it'll still be repaid by us eventually. On bills actually is the best way to repay as it'd be those who were getting the most advantage repaying rather than potentially someone who uses little/no energy.

jimexbox

sienew said:

jimexbox said:

Paid for through borrowing, not extra on bills. 

There are still conflicting reports on how it'll be funded.

Although borrowing or extra on bills doesn't really matter, it'll still be repaid by us eventually. On bills actually is the best way to repay as it'd be those who were getting the most advantage repaying rather than potentially someone who uses little/no energy.

Of course it matters. Do you think the national debt, currently over 2 trillion will ever be paid off?

Extra on bills will be. 

CATARRH

In terms of fixed versus price cap, one also needs to consider usage. The price cap say at £2500 will likely be based on OFGEM typical domestic consumption vales of 12000 kw/h for gas and 2900 kw/h for electricity. Assuming that any usage above these figures will not be subject to a price freeze and the October and January forecast rates will apply. Note also a statement from Scottish Power that all bills should be frozen at the current price cap and not just for consumers on the variable tariff.

savers_united

If the cap is frozen for more than 6mths then they should be offering via the energy companies to waive any exit fees, I think that is fair if everyone is going to be paying back the cost of this freeze then all should have benefit from it, the number choosing this option may be relatively small as those on lower price fixes will stay put, those on specialist fixes like EV tariffs may find it better to stay on their current tariff, some may just want the security of the fix even if it costs a bit more may feel that Gov't could again change the approach in a few months and could end up losing their fixed deal. 

Then we have plenty of fix that already have no exit fee anyway.

For any freeze less than 6mths then a current fix may still.work out cheaper over the term.

Everyone it feels is just trying to look out for themselves, I got a fix I'm alright Jack, I'm on the SVT so unlucky you got a fix live with it. Whatever is announced will never be perfect and there will be some losers, like there are those on a long term fix since last year who have a deal less than the current SVT and will still be getting the £400 or more, they are clearly winners here. 

sienew

jimexbox said:

sienew said:

jimexbox said:

Paid for through borrowing, not extra on bills. 

There are still conflicting reports on how it'll be funded.

Although borrowing or extra on bills doesn't really matter, it'll still be repaid by us eventually. On bills actually is the best way to repay as it'd be those who were getting the most advantage repaying rather than potentially someone who uses little/no energy.

Of course it matters. Do you think the national debt, currently over 2 trillion will ever be paid off?

Extra on bills will be. 

We pay for the debt even if we don't pay it off. Massive debt and money printing weaken the £ which has huge repercussions.

Also, the more debt and printing we do the closer we get to a potentially massive economic disaster. We can't just increase debt forever. We are just setting our children and grandchildren up to solve our problems later down the line.

jak22

The price cap is the price cap and there's no sign of the cap being frozen. It might go up less next year if wholesale prices are capped.

Even the media arent phrasing it as a price cap freeze but a bill freeze.

This scheme being mentioned in the media is a discount from the cap so that people wont be paying more than now. It might be a cash reduction or a unit price change - so that the nominal consumption works out at £2500 but each person ends up not paying more for their own consumption in their own region. Also businesses arent capped so they need a unit price change or cash discount.

mmmmikey

In addition to the question about what happens when the new "frozen" price cap comes to an end, my questions are:

1. What about VAT and the so-called green levy? Have changes there been superceded by the freeze? Or already factored in to the £2500 freeze point that is still speculation but widely reported? Or on top of that?

2. What about the balance between standing charges and unit rates - will anything significant happen there?

ElizaSue

I'm in the same situation with EDF that has dual fuel exit fees of £300 (24 month fix).  I didn't envisage that the Government would freeze the energy cap.  I thought they would increase benefits for poorer households.  I have now gone from feeling reasonably comfortable that I could pay my energy bills to rather concerned that I'll be paying much more than if I had stayed on the variable rate.  If the energy cap is frozen, then for me the tables will have turned because I'll be losing out big time.