British Gas latest increase!!

Munduru

Hello everyone,
I have watched Martin Lewis vid on increase in energy prices for about 10%.
I only recently signed with the above in July at a fixed tariff for £51 each month. Yesterday, I got an email informing me of a change to £91. Bearing mind, this is summer and I have been a way for a few weeks and that is definitely not a 10% increase! 
Has anyone got the same problem?
I believe they are in breach of contract and I should be allowed to change without any exit fee. 

Krakkkers

It's the price per unit that is fixed, if you use more you pay more.

born_again

So which tariff are you on & exactly what do you use?

So last couple of months actual usage from your meter readings (not estimates) & the tariff unit/standing charge costs?

Ayr_Rage

Your monthly DD payment covers your estimated usage.

It is not an all you can eat energy buffet fee.

There is absolutely no breach of contract, it is simply that you have not understood how the fix works, it is just the unit rates and standing charges that are fixed, your DD amount can vary.

You need to get your calculator out and see if that monthly fee matches your usage.

BarelySentientAI

Munduru said:

Hello everyone,
I have watched Martin Lewis vid on increase in energy prices for about 10%.
I only recently signed with the above in July at a fixed tariff for £51 each month. Yesterday, I got an email informing me of a change to £91. Bearing mind, this is summer and I have been a way for a few weeks and that is definitely not a 10% increase! 
Has anyone got the same problem?
I believe they are in breach of contract and I should be allowed to change without any exit fee. 

You have misunderstood how fixed tariffs, the price rises, energy bills and contracts in general work.

You agreed a fixed price per unit of energy and a fixed price per day standing charge.

You did not agree to "all I can use" for £51.  That was a guess at what your bill might need to be to cover what they guessed you might use across the term of the contract (usually 12 months).

If you are using more than they guessed, then your monthly payment goes up to cover it or you have a big debt at the end of your contract.  Having a big lump sum debt is generally considered bad.

The 10% rise does not apply to fixed tariffs, and is a change in the per unit and per day prices (on average, not a specific 10% anyway).  It has no relation at all to the monthly payment on your tariff, and only changes one part of the guess on anyone else's tariff.

FreeBear

Munduru said: I only recently signed with the above in July at a fixed tariff for £51 each month. Yesterday, I got an email informing me of a change to £91. Bearing mind, this is summer and I have been a way for a few weeks and that is definitely not a 10% increase!

My direct debit is currently set at £65 each month. Even although I'm on a highly variable rate tariff (prices change daily), it currently covers my monthly bill. Come winter when consumption increases, it is quite possible that my DD will need to increase.

BUT I am a low energy user currently paying below SVR or fixed rates. If I were on a fixed tariff, my DD would be 20-30% higher. I suspect your £91 will have to increase at the end of the year...

Robin9

@Munduru    The initial DD is at the very best a guess - what annual consumption figure (in kWh not £)  did you give them ? Now that BG has a couple of months data it can improve on its guess.

A DD of £51   (assuming electric) suggests a consumption of under 2000 kWh;   £91 of over 3,000 kWh

Scot_39

You believe wrong for potentially several reasons.

Unless they change the rates and standing charges - they are still likely compliant.

Suppliers and regulator are debt wary - so if you like are told if not obligated - by OFGEM - not to allow customers to get into excessive debts - at any point in the annual credit cycle. 

If you like made to review - and likely even more so  - for new customers - DD payments to avoid risk of said debt.

Annualised DD plans are essentially designed to operate based on building up credit during low use months to ride through higher winter months.

You pay more in summer than you use - pay less in winter than use.

Your DD isn't your price - it's an estimate of what it is going to take to pay your total price over the year (although many now update DDs more frequently - when prices were more stable - DD's were often only reviewed once per year - 10% in 3m is not old style pre crisis stable)

By starting in July - you are already 3-4 months behind in that cycle compared to many this year (my main heating went off in late Mar) - essentially you potentially don't have any credit stored up from say May, June, part July - to cover all of the winter months - all of which you will be paying for. 

Should that arguably have been included in the £51 yes - was it ??

And even if was  as per other posts above -

total cost per fuel = standing charge per day * days  + unit rate/kWh * units used

for you

variable                =                  "fixed"                         +       fixed        *  variable

for those on cap related tariffs

variable                =               variable                         +        variable   * variable

But by fixing you at least wont be paying an extra perhaps 10% for every unit you do use - come Oct 1st.

You have just protected yourself against the rate and SC changing - so better off than those who havent when prices increasing.  Forget everything ML said re cap - for now(*).

And for those on the cap - not those on fixes - it is the standing charge and unit rates - increasing - in combination - not each part - to increase the headline cap (estimated cost - for dual fuel paid by direct debit normally quoted most - for an average consumption averaged across all regions).

You still have the units used as a variable on your fix tariff - put simply - use more, pay more (use less, pay less)

As to other possible reasons for £51-91 now

If looks like you will use more kWh than either you quoted them or they guessed for you in July - based maybe on now just 4-6 weeks / maybe even last 1 months bill if monthly - of readings - you will be asked to pay more.

You might - just at a stretch - be able to claim the £51 was a severe underestimate - but for some that isn't an unbelievable number either. 

Can you remember how they came up with the £51 - as above did they estimate it - did you guess an annual consumption for them - was it a previous occupants use based estimate(*) - were you in property all last year - so had last 12m data etc.

If you have that sort of solid 12 m history - past basis - for you - you might be able to talk to them down on the DD level. Without a 12 m history - summer and winter - for you in your property - comparisons against others can be very misleading(*) - it is impossible to say whether £51 or £91 might be closer to being correct. 

But importantly think - what will you achieve if do get out of the fix.

If you win and come off the fix onto SVT - you are likely to face the ML quoted 10% (*) higher prices soon. 

And similarly if move - to another supplier - those same higher cap prices on a capped tariff. 

And if were to take on a similar 1 yr fix currently available now elsewhere - it would likely be closer to the Oct pricing than your current July fix.  

In short - you would only be making your costs higher in most other options on traditional tariffs

If you can afford to pay higher winter bills (many on low fixed incomes could struggle) - and don't like the credit cycle - some suppliers allow you to pay at DD rates - monthly. But as to whether BG would allow that - on your fix ??

You have told us no real information - fuel type, actual consumption to date, whether it even includes heating or not, property size / type, occupancy - for us to even try to guess annual range.

Its not even clear if you are new to the property, just switched to British Gas from elsewhere - or just taken the fix as a current long standing customer.

If new without opening and current readings, dates and your tariff rates - or you telling us what any usage charge you have been billed for and period of late - we don't even have a basis for current summer costs - let alone winter and so annual.

For me - £51 is low - even for a summer month - and only just gotten down near it at July's lowest since crisis cap rates.  My winter energy bills are can be in coldest months over triple in terms of kWh units - energy consumption.  So I don't expect my DD to be anywhere near it.  But for someone who heats hot water by gas - that £51 might seem excessive.  There is no one cost - there is only your cost

Gerry1

There's a post like this every month, if not every week.

It's high time that dozy Ofgem banned the misleading term 'Fixed' Direct Debit.  There's no such thing because the DD isn't fixed (it will almost certainly vary every three months with the price cap.  And of course, only the kWh and Standing Charge rates are fixed, not the actual DD amount; use more energy than expected and your DD will be increased.

'Fixed' Direct Debit also gets confused with a Fixed Tariff which is something completely different.

'Smoothed' or 'Equalised' DD would be more like Plain English.

Better still, dozy Ofgem should mandate that all suppliers should offer Variable Monthly DDs, preferably as the default option (with a warning that bills will be higher in winter than in summer).

BarelySentientAI

Gerry1 said:

Better still, dozy Ofgem should mandate that all suppliers should offer Variable Monthly DDs, preferably as the default option (with a warning that bills will be higher in winter than in summer).

They really shouldn't.

All we would then get would be complaints of price hikes and profiteering every winter, followed by accusations of putting people into debt.

If customers are confused enough to assume that energy bills are 'all you can use', making the default option one that is unpredictable and massively variable will not help.

OFGEM should mandate less things, not more.

pseudodox

Why should people be taken by surprise if they pay MVDD and get higher bills in winter?  We live in a country where generally speaking it is cold in winter, warm in summer & mild in autumn/spring.  Are these people also surprised every year when Christmas Day arrives on 25th December?   I enjoy LOWER bills in summer & get NORMAL ones in winter.  The summer ones leave me with more money to cover my other bills due from June to September like car/house insurance, road tax, boiler servicing, holidays & ice cream.

Back when the meter reader came round 4 times a year we all paid quarterly bills for the energy we had actually used.  Monthly bills do make more sense now - better cash flow for suppliers and consumers - and so much easier to administer with modern technology & online banking/DDs instead of posting off a cheque or visiting a showroom to pay cash.  But people should have the option to manage their own money, whether that be MVDD or FDD.  How many more times are there going to be posts that see FDD as "all you can eat".  We are developing a Nanny State instead of teaching people to take responsibility for themselves.