Energy price cap freeze on a fixed tariff

deano2099

Chrysalis said:

Are people really suggesting they rather have a cap of £3549 and be able to fix above £2500 instead of a cap ar £2500?  As that makes no sense to me.

It's because many people, especially posters here, care less about the actual price of their energy, and more whether they've "won" or "lost". Those who fixed looked to be winning, but then this has turned it around and they've now "lost" due to paying higher rates over the past few months.
They also feel they've lost as they're going to have to pay back the costs of borrowing on the money that they personally didn't need. And while I do understand that, the negative economical impacts of allow the cap to increase unchecked would have been far more damaging anyway.

sienew

deano2099 said:

Chrysalis said:

Are people really suggesting they rather have a cap of £3549 and be able to fix above £2500 instead of a cap ar £2500?  As that makes no sense to me.

It's because many people, especially posters here, care less about the actual price of their energy, and more whether they've "won" or "lost". Those who fixed looked to be winning, but then this has turned it around and they've now "lost" due to paying higher rates over the past few months.
They also feel they've lost as they're going to have to pay back the costs of borrowing on the money that they personally didn't need. And while I do understand that, the negative economical impacts of allow the cap to increase unchecked would have been far more damaging anyway.

Just FYI, I didn't lose. I did have a fix but it wasn't due to start until October 1st, has no exit fees and was only very slightly below the October price cap. In the short term I'm better off with the price guarantee.

I didn't lose out my point is that fixes are those who are risk averse, often on the poorer side (the very poorest are often on prepayment so have less options), those who are money conscious and are hoping for a deal. The issue is the risk of a fix in the next 5-10 years is now higher than sticking with the SVT. I'm not a fan of those who made the smart decision to fix at cheaper prices that overpaid for months being worse off.

Although I'm not a fan of this blanket handout anyway tbh. To me this is the least effective use of taxpayers money. Given most people will save £1000 from this scheme and someone like Rishi Sunak will get £13,000 to heat his new swimming pool doesn't seem like a particularly great idea to me. The outcome of an additional £200 billion+ of debt - especially added to the massive covid debt pile - seems like a very risky move for our country.

PeteHl

It's not the end of the world that I've paid 25% over the odds for 4 months but it irks that the energy company will profit from my gamble and I or my kids will still share the debt from govt subsidy I don't receive.

deano2099

sienew said:

deano2099 said:

Chrysalis said:

Are people really suggesting they rather have a cap of £3549 and be able to fix above £2500 instead of a cap ar £2500?  As that makes no sense to me.

It's because many people, especially posters here, care less about the actual price of their energy, and more whether they've "won" or "lost". Those who fixed looked to be winning, but then this has turned it around and they've now "lost" due to paying higher rates over the past few months.
They also feel they've lost as they're going to have to pay back the costs of borrowing on the money that they personally didn't need. And while I do understand that, the negative economical impacts of allow the cap to increase unchecked would have been far more damaging anyway.

Just FYI, I didn't lose. I did have a fix but it wasn't due to start until October 1st, has no exit fees and was only very slightly below the October price cap. In the short term I'm better off with the price guarantee.

I didn't lose out my point is that fixes are those who are risk averse, often on the poorer side (the very poorest are often on prepayment so have less options), those who are money conscious and are hoping for a deal. The issue is the risk of a fix in the next 5-10 years is now higher than sticking with the SVT. I'm not a fan of those who made the smart decision to fix at cheaper prices that overpaid for months being worse off.

But that's always the point of a fix isn't it? You fix at a price you can afford in case they go up. If they go down, you lose out. 
You are correct that gambling on government intervention was a very high risk strategy but occasionally those strategies pay off. And those who took the fix are still getting their energy for less than they fixed at in most cases.

The fundamental point is, that sometimes the smart decision isn't the right decision. If I have a die with six sides, and say you can guess that I'll roll a six, or that I won't roll a six, and if you get it right I'll give you £50. The correct response is to bet that I don't roll a six. Unarguably. That's the smart choice. 

But sometimes, I will roll a six and you'll go home with nothing. That doesn't mean you didn't make the smart choice, it doesn't mean you didn't make the best choice. It just means that even when we make the best choices with the information available to us, it won't always turn out to be the optimal choice in retrospect. 

I get the idea that we're rewarding people for making "the wrong choice" here as it's government intervention. But that's just one of those random things that happens from time to time. 95% of the time in energy, the smart decision will be the right one. Better to focus on all the savings you've made in previous years from making the smart decision, and all the savings you'll make in the future from making the smart decision, and acknowledge that nothing is every guaranteed, and this is just a couple of years, and most of us are in it for the long game.

Ultrasonic

deano2099 said:

You fix at a price you can afford in case they go up.

The trouble is that recently some were fixing at prices that they couldn't afford, but still did so as it seemed like a less bad option than the apparent alternative.

Ballymoney

We’re all flogging a dead horse with these horse racing analogies. Time to get of your high horse!

deano2099

michaels said:

Of course those who bother to take an interest, shop around and try to protect themselves will learn a valuable lesson:  Such behaviour will leave you worse off than being ignorant and feckless

The more we reward ignorant and feckless behaviour at the expanse of responsible behaviour, the more of it we will see.

Then they're learning the wrong lesson. The worst thing one can do is give up on trying to find the best deal because for 20 years before this week, that was the best option. And it'll likely continue to be the best option. Modifying a strategy that has worked and benefited you for decades because it has failed *once* is massively irrational behaviour. Indeed, I'd probably call *that* ignorant and feckless behaviour.
No strategy works 100% of the time, sometimes your best endeavours won't deliver the best results because of the inherent weirdness of life. That's just how it works. If a strategy delivered 100% of the time without fail, it wouldn't be a strategy, it'd just be what everyone did.
If people genuinely can't grasp that then they may not have quite the understanding of the market that they believe they do have.

sienew

deano2099 said:

sienew said:

deano2099 said:

Chrysalis said:

Are people really suggesting they rather have a cap of £3549 and be able to fix above £2500 instead of a cap ar £2500?  As that makes no sense to me.

It's because many people, especially posters here, care less about the actual price of their energy, and more whether they've "won" or "lost". Those who fixed looked to be winning, but then this has turned it around and they've now "lost" due to paying higher rates over the past few months.
They also feel they've lost as they're going to have to pay back the costs of borrowing on the money that they personally didn't need. And while I do understand that, the negative economical impacts of allow the cap to increase unchecked would have been far more damaging anyway.

Just FYI, I didn't lose. I did have a fix but it wasn't due to start until October 1st, has no exit fees and was only very slightly below the October price cap. In the short term I'm better off with the price guarantee.

I didn't lose out my point is that fixes are those who are risk averse, often on the poorer side (the very poorest are often on prepayment so have less options), those who are money conscious and are hoping for a deal. The issue is the risk of a fix in the next 5-10 years is now higher than sticking with the SVT. I'm not a fan of those who made the smart decision to fix at cheaper prices that overpaid for months being worse off.

But that's always the point of a fix isn't it? You fix at a price you can afford in case they go up.

No. If you are a regular here you'll see many people fixed at prices they couldn't afford because the predictions for the October (which turned out to be true) and beyond price caps were higher and if they couldn't afford a lower fix they certainly couldn't afford the upcoming price cap rise.

deano2099

What were those people planning to do when they couldn't pay the bill then?

sienew

deano2099 said:

What were those people planning to do when they couldn't pay the bill then?

The direct debits (based on current usage) were more than many could afford so they are or were planning to cut usage to reduce that. There have been many threads here of people figuring out how to cut usage. The smart energy monitoring plugs being out of stock for a while, increased in price and still being a #1 seller on Amazon. I think that shows just how many  people are trying to cut usage. 

And in any case, if they couldn't afford a £200 a month fix, they couldn't afford the expected £300 a month on the variable in January anyway so its was still better to consider the fix if you couldn't afford it to at least keep the potential debt down.