Energy price cap freeze on a fixed tariff

superkoopauk

spot1034 said:

[Deleted User] said:

There's a new factsheet just been discovered by another forumite - with two relevant points in my reading of it.

• The new cap will set a new maximum unit price for gas and electricity.

• The capped unit rates will apply to the SVT and to all fixed tariffs.

This seems to mean that all fixes above the cap will be reduced right down to cap levels, and all fixes below the cap will be left alone.  Very different from what Martin's tweets say.

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

So if that is true, there is still an incentive to cancel to save money in the run up to Oct 1st? 

Assuming the exit fees are waived which is not confirmed

ab1234567890abcdefgh

[Deleted User] said:

There's a new factsheet just been discovered by another forumite - with two relevant points in my reading of it.

• The new cap will set a new maximum unit price for gas and electricity.

• The capped unit rates will apply to the SVT and to all fixed tariffs.

This seems to mean that all fixes above the cap will be reduced right down to cap levels, and all fixes below the cap will be left alone.  Very different from what Martin's tweets say.

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

It's extremely vague.

It doesn't say how this "cap" is applied.  I suspect that applying a per unit price reduction in pence is the simplest way for energy suppliers to do this to both SVT and fixed rate tarriffs, so there is every chance that Martin is right.

Obviosuly the most cost-effective way is to cap everyone at the same rate, but cost-effectiveness isn't something governments tend to do well, and of course, time is of the essence on this one.  See: all the money that was spaffed up the wall with the great "more holes than a colander" COVID money giveaway.

Astria

superkoopauk said:

spot1034 said:

[Deleted User] said:

There's a new factsheet just been discovered by another forumite - with two relevant points in my reading of it.

• The new cap will set a new maximum unit price for gas and electricity.

• The capped unit rates will apply to the SVT and to all fixed tariffs.

This seems to mean that all fixes above the cap will be reduced right down to cap levels, and all fixes below the cap will be left alone.  Very different from what Martin's tweets say.

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

So if that is true, there is still an incentive to cancel to save money in the run up to Oct 1st? 

Assuming the exit fees are waived which is not confirmed

If we are going to pay the same on the fixed rate to that on the SVT then there's no reason to exit your fix?

daaave

Astria said:

superkoopauk said:

spot1034 said:

Deleted_User said:

There's a new factsheet just been discovered by another forumite - with two relevant points in my reading of it.

• The new cap will set a new maximum unit price for gas and electricity.

• The capped unit rates will apply to the SVT and to all fixed tariffs.

This seems to mean that all fixes above the cap will be reduced right down to cap levels, and all fixes below the cap will be left alone.  Very different from what Martin's tweets say.

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

So if that is true, there is still an incentive to cancel to save money in the run up to Oct 1st? 

Assuming the exit fees are waived which is not confirmed

If we are going to pay the same on the fixed rate to that on the SVT then there's no reason to exit your fix?

There’s a slight advantage - in between now and Oct 1 (?) when the new cap comes in, you’ll drop down to the current SVR capped rates. Assuming no exit fees.

For most users, it’s probably too much of a faff as it’ll be worth £25, or so. For large users it may be worth it.

xzibit

Astria said:

If we are going to pay the same on the fixed rate to that on the SVT then there's no reason to exit your fix?

That depends. If someone is currently paying 65p/kWh for electric and 18p/kWh for gas they could save money by immediately reverting to the SVT and paying 29.9p and 7.88p respectively between now and 1st October. I estimate we will save about £80 by doing this.

Astria

Yep, fair enough, those already paying for a fix above the new SVT will be worth exiting that fix now. For those who's fixes don't start until October 1st, no real reason to exit the fix.

mmmmikey

xzibit said:

Astria said:

If we are going to pay the same on the fixed rate to that on the SVT then there's no reason to exit your fix?

That depends. If someone is currently paying 65p/kWh for electric and 18p/kWh for gas they could save money by immediately reverting to the SVT and paying 29.9p and 7.88p respectively between now and 1st October. I estimate we will save about £80 by doing this.

......assuming there's no exit charge

Chrysalis

sienew said:

michaels said:

sienew said:

foxmeister said:

Sounds like if you’ve signed up for a fixed deal during the past 6 months you’re fcked ….

No. They are removing exit fees if you move to the new government backed tariff.

Only those who paid above the April cap in the hopes of saving on the October cap will lose out but there was no chance the government would ever do anything for them. Hopefully most didn't significantly over pay.

Is that in writing somewhere?

By Martin Lewis on this website and twitter:

https://twitter.com/MartinSLewis/status/1567831094740881410

Given ML's source is the Secretary of State for Business directly it is highly likely to be accurate

Ok so so still limited to SVR type tariffs, but exit fees all been waived.

Interesting that the government is considering making the COL payments annually, thats what I was calling for so this actually is ok if they continue in 2023.  Its still wasteful with it not been tiered but it could have been far worse.

Chrysalis

MWT said:

Important addition...

He changed his mind twice in quick succession, making it all very confusing, so my last reply is incorrect.

So he seems to mean either one of two things.

Either, Fixes over the SVR rate will be dropped to the SVR rate via subsidy. (credit on bill maybe).
Or, they will work out the pence per unit drop on SVR and apply the same pence per unit drop on fixes, if this happens those on fixes at lower than OCT rate will be laughing.

I think it has to be the former, otherwise some people on extremely low fixes now will be getting discounts.

[Deleted User]

Chrysalis said:

MWT said:

Important addition...

He changed his mind twice in quick succession, making it all very confusing, so my last reply is incorrect.

So he seems to mean either one of two things.

Either, Fixes over the SVR rate will be dropped to the SVR rate via subsidy. (credit on bill maybe).
Or, they will work out the pence per unit drop on SVR and apply the same pence per unit drop on fixes, if this happens those on fixes at lower than OCT rate will be laughing.

I think it has to be the former, otherwise some people on extremely low fixes now will be getting discounts.

The government and several suppliers have already published information saying that it is the first of those.

Martin has just confused everything with his tweeting of rumours and partial information.