I feel I've been penalised over £100 for being prudent and arranging a fixed rate tariff in June!

starnamer

In June I received an offer from British Gas to go onto a fixed rate tariff called Jun23V2 until June 2023.I'd previously been with People's Energy, so was on British Gas' People's Tariff with unit price of 28.021p and standing charge 42.242p which was the same as their Standard Variable Tariff. Jun23V2 offered a unit price of 34.503p and standing charge 47.722p.

Based on the prediction at the time that the OfGem Cap would rise to around £3000, after several hours working with a spreadsheet, I decided I was better off taking it up the offer and started paying the higher rate from the 26th of June.

When the Cap was announced at £3549, this appeared to this confirm I'd made the right decision as my savings would be even more.

Then the Government announced that they were fixing the Cap at £2500 and all my calculations and prudence were wiped out.

British Gas has adjusted the tariff I'm on, so the unit price is listed (and shows on my Smart Meter) as 33.477p which is almost the same as the quoted Standard Variable tariff 33.476p, but the standing change remains at 47.722p which is 4.5p higher than their quoted SVT rate of 43.260p. So, if things stay as they are, I'll pay an extra £16.42 over the year.

However, the bigger penalty for my prudence is that, according to my figures, by paying the fixed rate for just over 3 months, I've paid an extra £101.17 over what I would have paid by doing nothing! So, assuming no changes, by next June I'll have been charged an extra £113.48 for trying to budget.

I suspect there's nothing I can do about this since, although I haven't contacted them, I think I'll just be told that it was my decision to adopt the Jun23V2 rates and I lost out!

Does anyone think there's any point even contacting British Gas?

Does anyone else feel hard done by because of the government's decision to set the Cap at £2500?

I realise the government had to do something to help people who couldn't afford their energy bills, but feel they are penalising me and others like me who took precautions and tried to budget for the rises.

ariarnia

you could contact them and point out that on average usage your cap with the current standing charge is above the cap (if it is ii've not looked at the numbers) and ask if they would be reducing the standard charge pro rata. 

poppellerant

This is exactly why I'm not entirely convinced by fixed tariffs, because I feel that they pray and profiteer on people's fear.

At the end of the end of the day, by fixing you took a chance of what you thought was the right thing do.  Just as I took a chance and didn't fix my prices, which I also thought was the right thing to do.  As luck has it, I guessed correctly.  I would also argue that my guess was casually educated, because it was - but I knew there was a chance I would need a rather large container of lubrication if things went wrong.

macman

No one ever said that the fix would be cheaper than SVT. The point of a fix is that it's a kind of insurance policy: you pay an extra premium for knowing that the price you contract at will not rise again for 12m, or whatever the term is.

maisie_cat

We fixed until jun23 with BG as well, mainly because our fuel is 17% of our income and I wanted to give us some certainty. 
We still have certainty until next June, the tariff is exactly what we signed less the 1/10th of a penny they've reduced it and as annoying as the changing goal posts are we can't change it.
I believe those on BG fixes can transfer to the variable rate but I do not trust the government to not change the goalposts again in six months.
Once they realise that what they've also done is make it cheaper for the Beckhams to heat their various swimming pools they may change it again to motivate people to reduce their usage.
A universal subsidised tariff makes much more sense, but in the current climate most people will not fix again I suspect.

EssexHebridean

Hard done by? Nope, any more than I felt hard done by when for the final 3 years of our mortgage while we were still locked into a fix at 4.34% others are seeing rates around half that. We took the decision to fix slightly later than you - in July, and when the new cap was announced that choice (to pay an increased amount for basically 2 months ahead of the new cap starting) seemed vindicated. When the EPG was announced it proved that the fix was not best for us, and I’ve just switched again back to SVR with a new supplier. 

Hindsight is a marvellous thing - but ultimately all we can do is to research our choices fully with the information available to us at the time, and trust that we are doing the right thing *for us* based on that research.  Those of us who fixed during the summer or earlier knew - assuming that research was done - that there was going to be an increased cost in the short term, and that there was an element of risk involved.  Those factors should have been factored into the decision. 

starnamer

Keep_pedalling said:

everyone was basically throwing a dice on which way to jump. 

 That's my conclusion, which is why I don't think there's any point contacting them.

macman said:

The point of a fix is that it's a kind of insurance policy

True, I just wish it had been cheaper!

It's the same as some years ago when I got a 5-year fixed rate mortgage at 4.9%. Partway through, the variable rate dropped to below 3% but it wasn't worth getting out of the fixed rate! Fortunately, I no longer have a mortgage.

rp1974

For the first time in many years I'm not on a fix my choice my responsibility.
Pointless contacting British Gas as you agreed to a contract of your own choosing,what should the cap have been set at for you,OP?,to avoid feeling hard done by,assuming that you do by asking the question.
Though fixes are always going to be a gamble,it's saved me a lot of money previously,can totally understand those feeling aggrieved at loosing money that's the risk involved.
Given theres the option to drop to SVR,seems churlish to be hearing complaints over self chosen fixes without incurring any exit fees which would've otherwise been applicable,would be a very different matter if those agreeing to fixes were being forced to remain on them though,moot point as they're not.

[Deleted User]

No. I don’t feel hard done by. That’s how fixes work.

Would you have the same opinion if the cap hadn’t changed? That anybody who decided not to fix should feel penalised for their decision?

It’s been discussed several times here, the argument has been done to death.

Its nothing more than “I thought I would win but now I haven’t”

If you fill up your car and the next day they change fuel duty, do you deserve compo?

If the mortgage rate changes after you fixed, do you deserve compo?

Miser1964

If you don't ask, you don't get. 

ariarnia

poppellerant said:

This is exactly why I'm not entirely convinced by fixed tariffs, because I feel that they pray and profiteer on people's fear.

for years. probably for nearly a decade. we've paid much less than the standard variable tariff. maybe not always the exact cheapest fixes available but i would say annually we have saved every year compared to not fixing. even this year as we have a pre april fix until next spring. that's because in normal circumstances energy companies wanted customers to join and to guarantee the rate to allow them to hedge the market so offered tempting deals. i agree some rates on offer in the last 4 or 5 months have been actively go away tariffs because companies haven't wanted new customers unless they could make a hefty profit and that can be seen as taking advantage of people being scared but this current situation is not a fair time to judge if fixing is a good or bad idea in a less extreme market situation. 

i also agree that those who didn't fix before the government stepped in can't fairly be called feckless (i think that's bitterness from someone who didn't make the same call). f we hadn't been on our current fix then i don't think we would have taken a fix and we recommended the in laws not take a fix a few months ago because there weren't any that looked worth taking. it was a risk but i could not believe the government would do nothing ad gamboled they would do something like the pandemic schemes or maybe even nationalisation to break the back of it. and they did. we could have easily been wrong and then all those who are now complaining their fix didn't pay out would have been celebrating and saying those who didn't fix deserve the higher prices.