Energy price cap freeze on a fixed tariff

meat_n2_reg

I fixed my British Gas April 22 for 2 years at approx 19% more than Aprils cap , exit fees £100 per fuel 
Seemed a good idea at the time with the information I could see , I did not see the Government freezing cap due to the huge expense 
Seems to be a tough time recently for people trying to do the right thing , e.g. low saving rates etc 
I do hope the Government helps people with energy price , but don't forget people who tried to do the right thing 

Guess we will find out soon 

jimexbox

jak22 said:

We'd like them to drop the exit fees but it doesnt seem likely energy suppliers would push for that as they'd be losing out - it would have to come from the govt side and there's still no sign of any awareness of those on fixes above April cap. 

The freeze is more likely at current prices just for simplicity - no-one want to have to stand up and explain a scheme that makes sense on paper but not on TV and media headlines. Also the new PM could argue that the £400 was something from the previous administration and no longer relevant under a new deal that they've negotiated.

Why should energy be subsided as much between April and October when it's warmer? The price freeze can be set higher than the current cap, and subsided in the colder months.

savers_united

Whilst the fixed tariff issue is a tricky one, and I can see both sides, in the halls of power those on fixed deals will not be of concern as anyone who signed up to a fixed deal would have done the maths or had an estimate from their provider and accepted the fix as being affordable. The many millions who will be moving onto the Oct SVT have no choice and have not signed up to these increases and they will certainly be unaffordable for many of them. So the Gov't is looking to protect them from the shock increase, as I say those on a fix would have signed up knowing they could meet those payments. There is no argument, any minister challenged on this will say they are protecting the most vulnerable and the vast majority of energy users, anyone is free to move to the capped SVR if they chose. So all we are debating is the tariffs that will be above the frozen cap and have exit fees. 

[Deleted User]

I agree - it's only the exit fees that really matter.

The advice on here for many months has been to consider a fixed tariff like an insurance policy.  You pay more than you otherwise would have for a short time as insurance against higher prices in the future.  Moving (for free) onto the new cap if it is lower has the same effect, you've paid the 'insurance' and are not paying higher prices.

jak22

No - its also taking away the £400 that would have helped those on fixed just as much. Reading posts it seems those on fixed are needing to apologize for not having the incredible skill to foresee the cap being frozen and being wrong to have made some effort and taken out a fix.

sienew

jak22 said:

No - its also taking away the £400 that would have helped those on fixed just as much. Reading posts it seems those on fixed are needing to apologize for not having the incredible skill to foresee the cap being frozen and being wrong to have made some effort and taken out a fix.

I'd be careful making that prediction now. We don't know if they will fix the price and even if they do, we don't know the price. It's not unreasonable to imagine they cap at the October price (for longer than the 6 months) which makes most previous fixes worth it.

[Deleted User]

jak22 said:

No - its also taking away the £400 that would have helped those on fixed just as much. Reading posts it seems those on fixed are needing to apologize for not having the incredible skill to foresee the cap being frozen and being wrong to have made some effort and taken out a fix.

I've not seen any realistic suggestions that the already announced payment would be cancelled - have I missed something?

sienew

[Deleted User] said:

jak22 said:

No - its also taking away the £400 that would have helped those on fixed just as much. Reading posts it seems those on fixed are needing to apologize for not having the incredible skill to foresee the cap being frozen and being wrong to have made some effort and taken out a fix.

I've not seen any realistic suggestions that the already announced payment would be cancelled - have I missed something?

The new PM did previously say that all previously announced support packages would continue. It doesn't guarantee they will but hard to see it being cancelled unless a MUCH MUCH better package is announced.

jamtheman80

savers_united said:

Whilst the fixed tariff issue is a tricky one, and I can see both sides, in the halls of power those on fixed deals will not be of concern as anyone who signed up to a fixed deal would have done the maths or had an estimate from their provider and accepted the fix as being affordable. The many millions who will be moving onto the Oct SVT have no choice and have not signed up to these increases and they will certainly be unaffordable for many of them. So the Gov't is looking to protect them from the shock increase, as I say those on a fix would have signed up knowing they could meet those payments. There is no argument, any minister challenged on this will say they are protecting the most vulnerable and the vast majority of energy users, anyone is free to move to the capped SVR if they chose. So all we are debating is the tariffs that will be above the frozen cap and have exit fees. 

I think its hugely overstated on here by some how much actual free choice was involved in fixing during the summer. There is no comparison to other forms of contract or choosing a provider in normal times. Most were compelled out of genuine, justified fear (which was borne out) and the advice of Martin Lewis at the unaffordability of the cap rise that the government could now at the last minute prevent. The idea that they should now be trapped into contracts that pay higher rates than tonight's rushed arrangement and pay a high financial penalty if they leave them is as morally grotesque as saying those who stayed on the SVR just like it and lump it in October. 

[Deleted User]

jamtheman80 said:

savers_united said:

Whilst the fixed tariff issue is a tricky one, and I can see both sides, in the halls of power those on fixed deals will not be of concern as anyone who signed up to a fixed deal would have done the maths or had an estimate from their provider and accepted the fix as being affordable. The many millions who will be moving onto the Oct SVT have no choice and have not signed up to these increases and they will certainly be unaffordable for many of them. So the Gov't is looking to protect them from the shock increase, as I say those on a fix would have signed up knowing they could meet those payments. There is no argument, any minister challenged on this will say they are protecting the most vulnerable and the vast majority of energy users, anyone is free to move to the capped SVR if they chose. So all we are debating is the tariffs that will be above the frozen cap and have exit fees. 

I think its hugely overstated on here by some how much actual free choice was involved in fixing during the summer. There is no comparison to other forms of contract or choosing a provider in normal times. Most were compelled out of genuine, justified fear (which was borne out) and the advice of Martin Lewis at the unaffordability of the cap rise that the government could now at the last minute prevent. The idea that they should now be trapped into contracts that pay higher rates than tonight's rushed arrangement and pay a high financial penalty if they leave them is as morally grotesque as saying those who stayed on the SVR just like it and lump it in October. 

There was entirely free choice in fixing at any time.  Nobody was held at gunpoint and forced to sign a contract, nobody had a contract signed on their behalf and nobody had a contract imposed upon them (in fact the opposite was true).

Advice was freely offered, none of which said "you must", most of which said "you should consider".  What people chose to do was entirely up to them.  As a general principle, people who are free and competent to make decisions should be allowed to and should accept that their actions have consequences.

Whilst I completely agree that the suppliers should waive all exit fees as part of any cap freeze scheme underwritten by the government, this is a special case given the requirement for public funding support and certainly isn't because any previous circumstances were "morally grotesque".