Energy price cap freeze on a fixed tariff

[Deleted User]

Chrysalis said:

sienew said:

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.

Now those people will get dropped to the new SVR either via subsidy or free exit and actually have something a little more affordable, but somehow this is a bad thing?  Yes they will have lost money over paying prior to 1 Oct, but they would have lost a lot more with no EPG.

Somehow it's become a bad thing if anyone has ever paid a penny more than someone else, and everyone wants some sort of retrospective re-imbursement if they have ever paid a penny more than they had to under any circumstance.  Add that to the repeated threads saying "how is this fair, that person gets a bigger discount than me" and it all starts to look like a bunch of children.

MWT

[Deleted User] said:

Add that to the repeated threads saying "how is this fair, that person gets a bigger discount than me" and it all starts to look like a bunch of children.

Reminds me of the time I was invited to a Rotary luncheon, and the catering ran out of croquette potatoes half-way through service and switched to boiled, I thought they were going to lynch the Chef and sporadic fighting broke out over the last croquette..

sienew

Chrysalis said:

sienew said:

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.

Now those people will get dropped to the new SVR either via subsidy or free exit and actually have something a little more affordable, but somehow this is a bad thing?  Yes they will have lost money over paying prior to 1 Oct, but they would have lost a lot more with no EPG.

I didn't say that it was a bad thing. I said it will discourage people fixing in future.

[Deleted User]

sienew said:

Chrysalis said:

sienew said:

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.

Now those people will get dropped to the new SVR either via subsidy or free exit and actually have something a little more affordable, but somehow this is a bad thing?  Yes they will have lost money over paying prior to 1 Oct, but they would have lost a lot more with no EPG.

I didn't say that it was a bad thing. I said it will discourage people fixing in future.

I think it probably will for some people - it's natural to overemphasis a negative factor (particularly one you didn't predict) when making a similar judgement for a second time, plus there'll always be the expectation now that the government will just jump in again if things go bad.

mattgod69

This is an interesting thread.   I fixed at higher than the svr in April because I thought it was the best thing to do at the time to protect me and my family.  I am slightly higher than the Oct rate... looking at the government fachsheet it seems I should get a 17p/ kwh discount (like everyone) but I think I will only at most be put down to the guarantee rate.  Not really fair especially as we are all going to be asked to pay it back.... it shoild really be the same discount for everyone,  not just those who did nothing about fixing their energy costs... its similar to the covid help... whether you had help of not we are all going to have to pay it back.  Not fair or equitable but not the end of the world as long as those that really need the help get it... that is the most important thing... I don't mind paying a bit more to help the truly needy  but I would rather get a bit of help than lining shareholder's pockets or gat cat bonuses. 

Ultrasonic

Chrysalis said:

sienew said:

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.

Now those people will get dropped to the new SVR either via subsidy or free exit and actually have something a little more affordable, but somehow this is a bad thing?  

Nobody has said this is a bad thing, although be careful we don't know for certain everyone will be able to drop to the SVT without paying an exit fee yet. 

mattgod69

Im not sure Martin is reading this correctly in his comments:

My latest reading (the rules aren't finalised) is the reduction will only apply to fixes that will be more expensive than the price guarantee. Energy providers also tell us that their understanding of the Govt's rules (so far) is that higher fixed rates should at most only reduce to the level of the new guarantee. To help though, my BEST GUESS is it means...

- Very cheap fix: (eg, 2yr fix from before crisis started). If you'll pay less than the new price guarantee, there's no reduction.
- Mid-level fix: (eg, fixed 3-9mths ago at a premium). If your fix is higher than the new price guarantee, it will reduce to the same level as the new price guarantee.
- High-rate fix: (eg, fixed very recently at high rate to forestall predicted future huge hikes). Your fixed rate will reduce substantially but a few of these may still be costlier than the price guarantee (see point 6 for your options).

The factsheet is fairly clear:

If you’re on a fixed tariff

If you’re on a fixed tariff at a higher rate caused by recent energy price rises, your unit prices will be reduced by 17p/kWh for electricity and 4.2p/kWh for gas.

These unit prices have been passed to suppliers to ensure that they are used to calculate bills on time for 1 October.

Energy suppliers will adjust fixed tariffs automatically. Customers on fixed tariffs do not need to take any action to get the benefits of this scheme.

Nothing about bringing down the the guaranteed rate?  It is a fixed reduction  regardless... why are they being allowed choose what to do? I think we are in danger of the suppliers interpreting this to their own advantage and being able to claim the full discount from the government... I hope this wouldn't happen but it is clearly a risk.... 

Ultrasonic

mattgod69 said:

Nothing about bringing down the the guaranteed rate?  It is a fixed reduction  regardless... why are they being allowed choose what to do? I think we are in danger of the suppliers interpreting this to their own advantage and being able to claim the full discount from the government... I hope this wouldn't happen but it is clearly a risk.... 

It's probably more the government setting the limits I'd have thought. If the government are paying the difference anyway the energy companies wouldn't particularly care either way I'd have thought.

Edit: beyond if one option is easier for them to implement I suppose.

mattgod69

Ultrasonic said:

mattgod69 said:

Nothing about bringing down the the guaranteed rate?  It is a fixed reduction  regardless... why are they being allowed choose what to do? I think we are in danger of the suppliers interpreting this to their own advantage and being able to claim the full discount from the government... I hope this wouldn't happen but it is clearly a risk.... 

It's probably more the government setting the limits I'd have thought. If the government are paying the difference anyway the energy companies wouldn't particularly care either way I'd have thought.

Edit: beyond if one option is easier for them to implement I suppose.

Yeah possibly, but there is a real risk this could happen don't you think.... 

Ultrasonic

mattgod69 said:

Ultrasonic said:

mattgod69 said:

Nothing about bringing down the the guaranteed rate?  It is a fixed reduction  regardless... why are they being allowed choose what to do? I think we are in danger of the suppliers interpreting this to their own advantage and being able to claim the full discount from the government... I hope this wouldn't happen but it is clearly a risk.... 

It's probably more the government setting the limits I'd have thought. If the government are paying the difference anyway the energy companies wouldn't particularly care either way I'd have thought.

Edit: beyond if one option is easier for them to implement I suppose.

Yeah possibly, but there is a real risk this could happen don't you think.... 

Risk what could happen? If you mean fixed tariffs not being reduced to below the EPG this is what I think most here are probably expecting to happen now.