Autumn Budget 2025: Energy bills to be cut by £150 from April 2026

EssexHebridean

JamesO said:

As someone on a fix I'm not understanding why Martin would want to set the precedent of people on fixes having their rates changed during the fix... that's the whole point of a fix. 

This relates to an in-effect tax saving for people though - that's the way it's been dressed up in the budget at least. On that basis, no it wouldn't be fair if those who'd done the prudent thing and made the effort to fix to save themselves money then didn't benefit from the saving which is supposed to be available for all households. 

JamesO

EssexHebridean said:

JamesO said:

As someone on a fix I'm not understanding why Martin would want to set the precedent of people on fixes having their rates changed during the fix... that's the whole point of a fix. 

This relates to an in-effect tax saving for people though - that's the way it's been dressed up in the budget at least. On that basis, no it wouldn't be fair if those who'd done the prudent thing and made the effort to fix to save themselves money then didn't benefit from the saving which is supposed to be available for all households. 

And when the rates go up for the investment in the network ofgem have approved? 

The reason for doing the 'prudent thing' and fixing is to not have your rates change when prices go up OR down... like I said, it's a dangerous precedent for the sake of a small 'average' time limited saving. 

MattMattMattUK

JamesO said:

EssexHebridean said:

JamesO said:

As someone on a fix I'm not understanding why Martin would want to set the precedent of people on fixes having their rates changed during the fix... that's the whole point of a fix. 

This relates to an in-effect tax saving for people though - that's the way it's been dressed up in the budget at least. On that basis, no it wouldn't be fair if those who'd done the prudent thing and made the effort to fix to save themselves money then didn't benefit from the saving which is supposed to be available for all households. 

And when the rates go up for the investment in the network ofgem have approved? 

Those rates will only come in after current fixes expire or will impact very few, they do not kick in until the April 2026 and most of them are back loaded towards 2031. Energy suppliers will take a small hit on the increased payments they are required to make to the network operators where they have made longer term fixes. 

JamesO said:

The reason for doing the 'prudent thing' and fixing is to not have your rates change when prices go up OR down... like I said, it's a dangerous precedent for the sake of a small 'average' time limited saving. 

It does not need to set a precedent, it is in effect being treated as a tax cut, so just as prices would go up or down if the VAT rate changed it does make some sense to move fixes for this. It is imperfect but either choice would be. 

Scot_39

MattMattMattUK said:

JamesO said:

EssexHebridean said:

JamesO said:

As someone on a fix I'm not understanding why Martin would want to set the precedent of people on fixes having their rates changed during the fix... that's the whole point of a fix. 

This relates to an in-effect tax saving for people though - that's the way it's been dressed up in the budget at least. On that basis, no it wouldn't be fair if those who'd done the prudent thing and made the effort to fix to save themselves money then didn't benefit from the saving which is supposed to be available for all households. 

And when the rates go up for the investment in the network ofgem have approved? 

Those rates will only come in after current fixes expire or will impact very few, they do not kick in until the April 2026 and most of them are back loaded towards 2031. Energy suppliers will take a small hit on the increased payments they are required to make to the network operators where they have made longer term fixes. 

Disagree completely - as its not just a forward looking change.

This pressure to pass on or not costs - is not new.  Nor are new costs introduced by markets and govt / regulator - absorbed in past at great cost by suppliers - think SoLR standing charge and unit costs for those with fixes.  My siblings electric SC and unit rates doubled at the end of a 2 year fix in 2023 - costing the supplier probably far more than their profit allowances - its not likely they could hedge for the SoLR adders.  

It smells of hypocrisy - for likes of ML - less so EM for obvious reasons - to separate the budget changes from other policy changes - and not just in terms of the new £108 over 5 years - but current and recently announced policy costs - even the directly clearly pseudo tax substitute policy costs like WHD - which has been adding to rates on SVT for months now - and is about to add even more come Jan.  

Part of Ofgem breakdown policy line - which has in the Ofgem cap breakdown in last 21m of caps - gone up £79 /50% on duel fuel cap from Mar 31st 24 - so in Apr 24 to Jan 26 caps.

And worse in short term - for this winter - the PC2 cap up £85 - over 7% - thanks largely to govt policy issues and changes to network costs - in just the last 2 caps - so 3 months.  

So they add with one hand in the caps - and take away with another in the budget.  Or at least as far as energy bills - but the levys haven't been scrapped - their just having c75% paid by taxation - at least until 2029.  So even more smoke and mirrors.  As at least for the green levies - someone is still paying the price for govt net zero policy.

When it would be far better not to add in the first place.  And more to the point not to continue to add - and at an increased rate - for years to come as has long been predicted.

With luck the Reeves ECO and levy changes might just get electricity bills for those only on electric - PC2 tariffs like E7 - back to September levels.  But only after the worst of winter has passed.

Gas users - well there Jan saving - disguises the reality facing many others - but only due to international markets - as even they have faced higher network cost and policy adders like WHD.  So even their bills arent falling as quickly as they should have.

Its classic smoke and mirrors - sure come April - they will be out claiming they have saved - they have cut energy price inflation - but you dont hear them accepting right now - or come Jan when the latest £51 extra on PC2 cap kicks in - adding to winter misery for many - that they have consistently driven rising costs - that they have driven energy price inflation.

As to EM letter (and to some extent the ML postings demands) - it stinks to complain one set of costs gets passed through when it saves consumers - but not to argue the same when his policy increases costs - that the increases shouldn't be passed on.  Especially given the perilous state of suppliers finances and an ever growing debt mountain.

Many - not all - consumers have the choice in UK of

fixed price contracts - good or bad

variable rate contracts

and at at least one supplier

fixed term contracts with fixed wholesale cost components - but with pass through for policy costs - good or bad.

I dont remember the likes of ML or EM arguing that fixes should go up to cover those recent past policy driven cost increases - or other past rises  - whether net zero, network or social like WHD - as well as numerous network and net zero related policy - like the £14 for nuclear nRAB funding model.  

And whilst you can see why EM et al might be desperate for some good news before May.

In summery - ask yourself 2 simple questions

Did either send letters or posts to insist suppliers charge duel fuel customers on a fix say the 5.1% higher average electricity unit rates that those on the capped SVT rates now face - at the height of winter.

Or in the historical case from c3 yrs ago above - for them to pass on SoLR levy costs immediately.

If you were on a fix then or now would you be happy if they did ?

Eldi_Dos

Another thought on changing charges while on a fix is there could then be a argument made that early exit fees no longer apply, cannot see suppliers liking that argument.

Scot_39

Who are they going to sell any hedged energy to - if all upped and not just switched rates - but switched suppliers.

There is a reason exit fees exist - and the costs under the fix will in part often reflect the certainty - with a higher discount.

Looking at the MSE fix tables - those with fees - are often a few % cheaper than those without.

michaels

JamesO said:

As someone on a fix I'm not understanding why Martin would want to set the precedent of people on fixes having their rates changed during the fix... that's the whole point of a fix. 

SO the govt (tax payer) is funding what is effectively a tax cut on electricity supply and you would rather this goes to the energy supply companies than the end consumers?!

QrizB

Most suppliers T&C include something that says they will vary even a fixed tariff if tax rates change. If these levies had been expressed in those terms, as a tax, we wouldn't need to have this discussion.

Scot_39

michaels said:

JamesO said:

As someone on a fix I'm not understanding why Martin would want to set the precedent of people on fixes having their rates changed during the fix... that's the whole point of a fix. 

SO the govt (tax payer) is funding what is effectively a tax cut on electricity supply and you would rather this goes to the energy supply companies than the end consumers?!

Given that the same govt has raised such taxes - and they - the suppliers have not passed them on to fixes - like those in the current Oct and the coming Jan caps - without the minister "demanding" the suppliers pass the rises on (despite the weak finances of many suppliers - and the size of the rises relative to operating margin allowances like EBIT).

Historically SoLR was a govt policy - cost ave consumer £100 - did your fixes - if were on one at time - go up to pay for it ?

But just in the last 2 caps 

The network costs have increased by £24 in Oct - mainly electric, some gas -  did you fix prices go up for that - the SVT already has.

£17 and £9 for WHD is a govt policy - did your fix - gas and electric - as it applies to both - go up for that £17 and will they go up for £9 - or were / will suppliers expected to absorb it ?

The SVT already has and will again in Jan

£14 for nRAB nuclear funding is a govt policy - did you fix go up for that - or were your fix suppliers expected to absorb it ?

The SVT will in Jan - the electric rate by 5.1%.

Recent gas wholesale supplier price falls have shielded duel fuel homes on SVT - for now - from latest govt energy policy rises - far better than all electric - one cap up 2+0.2% - the other up 3%+4.3% on that - so 7.4% in 3 months - largely due to govt policy and policy changes. 

And those last 3 months on top of biiger in past - In the last 7 caps over 21months - from Apr 24 to Jan 26 caps - the policy costs alone in Ofgem breakdown in the dual fuel cap - have increased £79/50%.  Are you arguing those on 2 yr fixes taken out in Mar 24 - should now be paying that extra £79 - or should they be paying contracted rates ?

So to turn your argument on its head - 

Why should those on SVT pay those other pseudo tax increase now and again after Jan - and those on fixes not ?

IF you want fixes to remain as are - and not morph to the likes of SP Flexi - which has policy pass through.

Given the ever changing headwinds of govt policy - frankly surprised others have not gone for it

For those unfamiliar with the concept - and note this iirc came in after the crisis (after a period where for instance my siblings 2 yr SP fix saw the electric SC double - so 25p per day at end -  until then SP absorbed the 25p - far in excess of the duel fuel cap ebit allowance of around 10-15p/day and gas rate was protected by fix too )

https://www.scottishpower.co.uk/flexi

"Our Flexi tariffs consist of two parts. The first part is a fixed price, the majority of which is for the energy we supply you, so this protects you from any increase in wholesale energy costs. The second part is the variable costs, which are linked to external industry costs such as network, social and environmental obligation costs that may increase or decrease throughout the tariff term. If these variable costs change, the charges payable by you will be updated on a quarterly basis on 1st January, 1st April, 1st July and 1st October until the end of the tariff and these new charges will apply until the next quarterly update."

So if you signed up to a fix - rather than a flexi part fix with pass through - should you not expect a fix ?

That sometimes you will win and sometimes the supplier or their supplier or govt wins ?

Sometimes you do better than those on variable - sometimes you do worse ?

If you like - the risks of fixing - since day 1 of fixes.

Qyburn

Fixes received the EPG subsidy if I remember rightly.