Fixed Tariff Reduction

yokehouse

So I see fixed tariffs will be reduced automatically by up to 17 pence per KWh for electricity.  My tariff is fixed at 40p so will be reduced to 34p.  So what was the point of fixing my tariff.  I have/am paying 12 pence more than the current rate for 2 months only to be moved back to the new price guarantee of 34 pence.  Shouldn’t I immediately step out of my fixed rate as I have no penalty?

lisyloo

You’ll be reduced down to the cap, bearing in mind regional and method of payment variations.
The point in fixing was to protect you from rising market prices. It’s become redundant as the govt have stepped in.

I wouldn’t do anything immediately.
1) compare the standing charge. You may still be benefitting a little.
2) there’s an outside chance your fix may protect you. E.g. labour govt who cancel the “guarantee”
3) you might get a loyalty deal next.

im sticking with my fix.

The_Fat_Controller

Do your sums and make sure you check the standing charges too !

When you fixed that was on the information available at the time, now the goalposts have moved you need to reassess your options just the same as millions of us.

Chrysalis

lisyloo said:

You’ll be reduced down to the cap, bearing in mind regional and method of payment variations.
The point in fixing was to protect you from rising market prices. It’s become redundant as the govt have stepped in.

I wouldn’t do anything immediately.
1) compare the standing charge. You may still be benefitting a little.
2) there’s an outside chance your fix may protect you. E.g. labour govt who cancel the “guarantee”
3) you might get a loyalty deal next.

im sticking with my fix.

Also #4 which many dont consider.

Fixes are already budgeted for by the supplier, meaning if the subsidy is lower it is costing taxpayers less money, this is from a social point of view rather than individual needs.

Government has only committed for 3 months, so deffo agree on your point #2.

K2rool

lisyloo said:

You’ll be reduced down to the cap, bearing in mind regional and method of payment variations.
The point in fixing was to protect you from rising market prices. It’s become redundant as the govt have stepped in.

I wouldn’t do anything immediately.
1) compare the standing charge. You may still be benefitting a little.
2) there’s an outside chance your fix may protect you. E.g. labour govt who cancel the “guarantee”
3) you might get a loyalty deal next.

im sticking with my fix.

I do think sticking to the fix is the best options if its reduced to same as cap, since it will protect you from point #2 I don't think that going to happen, if labour did get into power doubt they would scrap it without a similar plan to cap unit prices if they just got rid of and the wholesale price are still higher then at the moment, then people on SVT will get majorly burnt. 

lisyloo

K2rool said:

lisyloo said:

You’ll be reduced down to the cap, bearing in mind regional and method of payment variations.
The point in fixing was to protect you from rising market prices. It’s become redundant as the govt have stepped in.

I wouldn’t do anything immediately.
1) compare the standing charge. You may still be benefitting a little.
2) there’s an outside chance your fix may protect you. E.g. labour govt who cancel the “guarantee”
3) you might get a loyalty deal next.

im sticking with my fix.

I do think sticking to the fix is the best options if its reduced to same as cap, since it will protect you from point #2 I don't think that going to happen, if labour did get into power doubt they would scrap it without a similar plan to cap unit prices if they just got rid of and the wholesale price are still higher then at the moment, then people on SVT will get majorly burnt. 

Point #2 was merely an example.
no one expected a pandemic, war in ukraine, huge increases and high inflation etc.
Point #2 is recognising that we don’t know what we will happen.
lockdowns, huge energy increases were previously unthinkable.
so point#2 is everything that’s currently unthinkable, that we know from recent experience can happen

if you personally don’t value security then it may not be a highly weighted item for you but in general it has some value for many people.

brewerdave

Point #2 is irrelevant if it is above the new EPG cap. The way it reads is that in such a position the customer's tariff will be automatically reduced to the cap with an end date of 30/9/24 - no customer choice.

lisyloo

brewerdave said:

Point #2 is irrelevant if it is above the new EPG cap. The way it reads is that in such a position the customer's tariff will be automatically reduced to the cap with an end date of 30/9/24 - no customer choice.

No that’s not point 2.
point 2 is that there is an (admittedly small) chance that something could happen that changes the “guarantee”.
a new government was the first example that sprang to mind.

if you think there is zero possibility then by all means dismiss point 2.

after lockdown, Ukraine etc. I no longer believe in government “guarantees”
that’s not some wild conspiracy theory.
The lockdowns we had and the restrictions on our lives were previously unthinkable, so there is evidence that the unthinkable can happen.

if you think the guarantee is written in stone then dismiss point 2, but don’t mis-interpret it. It means currently unthinkable events that change the guarantee.

The_Fat_Controller

Fixes will be reduced to the new EPG cap but there is nowhere in any information that I can see to say that fixed terms will change to match the EPG end date.

If several of the 4 elements in a dual tariff are already below the EPG cap, then when the fix runs out and if that is prior to 30/9/24 then the customer will move to the EPG rates until 30/9/24 with an increase in their bill.

I am currently on fix that has 3/4 elements below the EPG numbers and 1 above, so will wait and see what EDF do.

QrizB

The_Fat_Controller said:

Fixes will be reduced to the new EPG cap but there is nowhere in any information that I can see to say that fixed terms will change to match the EPG end date.

You could imagine that fixed-rate customers will continue on their fixed rates until they end, but will receive a rebate from their energy supplier that will reduce their effective unit rates to match the EPG (or by 17p / 4.2p if they fixed above the October Ofgem cap).

brewerdave

lisyloo said:

brewerdave said:

Point #2 is irrelevant if it is above the new EPG cap. The way it reads is that in such a position the customer's tariff will be automatically reduced to the cap with an end date of 30/9/24 - no customer choice.

No that’s not point 2.
point 2 is that there is an (admittedly small) chance that something could happen that changes the “guarantee”.
a new government was the first example that sprang to mind.

if you think there is zero possibility then by all means dismiss point 2.

after lockdown, Ukraine etc. I no longer believe in government “guarantees”
that’s not some wild conspiracy theory.
The lockdowns we had and the restrictions on our lives were previously unthinkable, so there is evidence that the unthinkable can happen.

if you think the guarantee is written in stone then dismiss point 2, but don’t mis-interpret it. It means currently unthinkable events that change the guarantee.

The way I read it, you won't have a choice to stay on the fix whether you want to or not-  if it is above the EPG  it won't exist after Oct. 1st, so if the "unthinkable" happens in the future....then join the rest of us!!