Energy price cap freeze on a fixed tariff

sienew

MWT said:

Spies said:

Still rubbish that people who had the foresight to take a fixed rate early on are out of pocket now. 

They were always going to be 'out of pocket' for the period up to October if they took a fix above the current cap, and if their fix is above the new cap they are going to see a reduction down to that cap so they still gain.

Nothing there to be unhappy about unless you really wanted the prices to be higher...

It was always a gamble and I'm happy to have fixed in the spring so I had peace of mind all summer that nothing bad was heading my way in October, paying a few pounds extra for that was well worth it...

The issue I see with this is that I think it will strongly discourage people fixing in future and encourages an attitude that people don't need personal responsibility/action because the government will save them (as they have).

MuckChucker

sienew said:

MWT said:

Spies said:

Still rubbish that people who had the foresight to take a fixed rate early on are out of pocket now. 

They were always going to be 'out of pocket' for the period up to October if they took a fix above the current cap, and if their fix is above the new cap they are going to see a reduction down to that cap so they still gain.

Nothing there to be unhappy about unless you really wanted the prices to be higher...

It was always a gamble and I'm happy to have fixed in the spring so I had peace of mind all summer that nothing bad was heading my way in October, paying a few pounds extra for that was well worth it...

The issue I see with this is that I think it will strongly discourage people fixing in future and encourages an attitude that people don't need personal responsibility/action because the government will save them (as they have).

Hang on, this is a complete anomaly of a situation. The government have to step in here. The alternative is deaths, business closures, unemployment, crime increases....

Normal time personal responsibility does not factor here. All current fixes will end at some point and who knows what kind of market faces those customers then.

Ultrasonic

I think the issue of people who have been overpaying on fixed tariffs is a really tricky one. For myself I'll have only paid ballpark £60 more from March through October vs the SVT but for some higher energy users on more expensive tariffs (albeit likely for less time) they will have paid significantly more than this. I would certainly have sympathy for such people feeling aggrieved, particularly for those already struggling financially who felt almost forced into signing up for fixed tariffs given the horror stories of what was coming.

MWT

Ultrasonic said:

I think the issue of people who have been overpaying on fixed tariffs is a really tricky one.

There is certainly a sliding scale of pain for those who took fixes in the past 6 months, and some will feel they have 'lost' by doing it, and they have my sympathy too.

The degree of pain is mitigated by it being the typically the lowest consumption months of the year, but it is still pain.

The part I don't have sympathy for is the feeling that someone else should have lost more than they did because they didn't fix.

Nobody in 'winning' here, gas is going up by around 40% from the current SVT and electricity by around 20% we are all losing and I don't feel any better because someone else loses more than me.

The Germans have a word for it... schadenfreude.

Ultrasonic

MWT said:

 I don't feel any better because someone else loses more than me.

Agreed. It's the element of having paid more with the genuine expectation it would save money in the long term that I have sympathy with, including where this was done on the basis of advice offered in good faith via this forum and elsewhere.

[Deleted User]

Ultrasonic said:

MWT said:

 I don't feel any better because someone else loses more than me.

Agreed. It's the element of having paid more with the genuine expectation it would save money in the long term that I have sympathy with, including where this was done on the basis of advice offered in good faith via this forum and elsewhere.

But you can offset that expectation against the peace-of-mind from knowing that their price wasn't going to go up.

Ultrasonic

[Deleted User] said:

Ultrasonic said:

MWT said:

 I don't feel any better because someone else loses more than me.

Agreed. It's the element of having paid more with the genuine expectation it would save money in the long term that I have sympathy with, including where this was done on the basis of advice offered in good faith via this forum and elsewhere.

But you can offset that expectation against the peace-of-mind from knowing that their price wasn't going to go up.

For some the financial element may well be far more significant though. Particularly for those who fixed at rates they already didn't know how they were going to afford 

As I said initially this is tricky, with no right or wrong. 

deano2099

Spies said:

Still rubbish that people who had the foresight to take a fixed rate early on are out of pocket now. 

It wasn't really foresight, they got it wrong. It's like gambling on the odds-on favourite and then complaining you're out of pocket when one of the longshots wins.
I'm also surprised that people are so quick to potentially make the same mistake again. It's been stated that this cap is for two years, but there's no guarantee there, a changing political climate could easily see it scrapped. It's just as guaranteed as "no more handouts" or whatever Truss said in the leadership race that gave people the confidence to fix in the first place.
If you're on a fix with more than a few months left at close to the cap, I'd argue that staying on it may well be wise. A contract is worth much more than a government promise.

Ultrasonic

deano2099 said:

It wasn't really foresight, they got it wrong. 

I disagree with that. I decided to fix on 27 February just after Russia invading Ukraine, correctly predicting that energy prices would go up dramatically. What you could argue I didn't predict was things getting so bad that the government felt obliged to intervene. I'm not looking for any sort of prize here but I don't think the quoted comment is a universally fair characterisation.

YellowStarling

The added complication is those that don't benefit directly from any discount will still be contributing to its funding over the next X years.