MSE News: Energy prices will NOT be capped at £1,137/yr, says Martin

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MSE_Andrew
MSE_Andrew Posts: 173 MSE Staff
First Post First Anniversary Photogenic I've been Money Tipped!
edited 6 November 2018 at 3:35PM in Energy
The energy price cap announced today is "misnamed" and is NOT an indication of the maximum amount householders will pay, Martin Lewis has warned...
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'Energy prices will NOT be capped at £1,137/yr, says Martin'
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  • The_Blacklist
    The_Blacklist Posts: 18 Forumite
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    [FONT=&quot]Martin is correct.[/FONT]
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    [/FONT]
    [FONT=&quot]Be very careful and do not celebrate this "cap" by Ofgem[/FONT]
    [FONT=&quot]
    [/FONT]
    [FONT=&quot]The cap is not on the energy bills.[/FONT]
    [FONT=&quot]
    [/FONT]
    [FONT=&quot]This “price cap” is of no benefit if you are on a fixed-term energy tariff you have chosen, the cap will not protect your prices.[/FONT]
    [FONT=&quot]
    [/FONT]
    [FONT=&quot]Best solution would be to check the tariff you are on then find out if you will benefit by moving to the Standard Tariff and see if you can change without any penalty.[/FONT]
    [FONT=&quot]
    [/FONT]
    [FONT=&quot]Do not forget the Standing Charges in your calculations.[/FONT]
    [FONT=&quot] [/FONT]
  • daveyjp
    daveyjp Posts: 12,521 Forumite
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    BBC are just as bad. Full blown headline of a cap at the figure, then the last paragraph they actually explain what is capped.
  • wavelets
    wavelets Posts: 1,164 Forumite
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    daveyjp wrote: »
    BBC are just as bad. Full blown headline of a cap at the figure, then the last paragraph they actually explain what is capped.

    Martin must have missed that explanation in his rush to publish his rant against Auntie
  • System
    System Posts: 178,093 Community Admin
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    There seems to be something of a concerted effort on the part of the MoneySupermarket Empire to highlight the downsides of this ill thought through scheme.

    Quote: Ofgem's February backstop came under fire from Stephen Murray, energy expert at price comparison site MoneySuperMarket, who accused the regulator of setting a cap that failed to take into account current prices.

    He said: "Unfortunately, any joy that long-suffering households feel today is likely to be short-lived.

    "Ofgem is attempting to protect consumers by launching this cap with a £76 savings message, but it's simply not sustainable.

    "The cap will be reviewed again in February, when market forces look likely to dictate it will rise significantly.

    "That means we could be looking at three months' gain and then 12-18 months of long-term pain for people who do nothing and let the regulator control their bills." Unquote

    Source: Sky News
  • matelodave
    matelodave Posts: 8,608 Forumite
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    If you aren't on a "standard"tariff then you probably wont be affected.

    The so called price cap has really been overhyped, most people won't see a difference because their energy bills will not be capped. The cap applies to the cost of a unit of leccy/standing charge so if you use more you'll pay more and if if you use less you'll pay less.

    The price of energy wont actually go down it's just that there'll be a limit to the increases. However as this will get revised twice a year I guess those on a standard tariff can all confidently look forward to a twice a year rise.

    The other consequence is that fixed price deals wont be as cheap as they were and some non-standard deals could actually work out as being more expensive to pay for it.

    There are always unintended or unforseen consequences, especially when the government or other do-gooders put their oar in.

    Those changes which appear to save some people money will have to be paid for by others. Nothing comes for free.
    Never under estimate the power of stupid people in large numbers
  • joncombe
    joncombe Posts: 320 Forumite
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    matelodave wrote: »
    If you aren't on a "standard"tariff then you probably wont be affected.

    The so called price cap has really been overhyped, most people won't see a difference because their energy bills will not be capped. The cap applies to the cost of a unit of leccy/standing charge so if you use more you'll pay more and if if you use less you'll pay less.


    I'm on a standard tariff because it's actually the cheapest (Ebico Zero). As a result, Ebico are ending the tariff and introducting a standing charge. By their own predictions, if I use the same over the following year as the previous year I can expect my costs to increase to 50%.


    If I switch to the next best tariff, I will only have to pay a 21% increase.


    It's this sort of price increase Ofgem is *supposed* to be preventing, rather than causing. Or at least it is if you assume Ofgem is working in favour of the public, rather than the suppliers (which they clearly aren't).
  • redux
    redux Posts: 22,976 Forumite
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    MSE Energy Club sent me a email to say now I've reached the point where I can save over £50 a year by switching.

    When I log in and do a new check, I'm still on cheaper than the cheapest.

    That reminds me of a slogan from somewhere ...
  • Consumerist
    Consumerist Posts: 6,310 Forumite
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    It seems to me that Ofgem have been on a mission with something akin to tunnel vision to get everyone switching. Having had a limited success in that endeavour it looks as though they won't now be happy till everyone is paying exactly the same rates for their energy.

    Soon it won't be worth switching anyway.
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
  • HUMBUG
    HUMBUG Posts: 346 Forumite
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    Consumerist wrote: »
    It seems to me that Ofgem have been on a mission with something akin to tunnel vision to get everyone switching. Having had a limited success in that endeavour it looks as though they won't now be happy till everyone is paying exactly the same rates for their energy.

    Soon it won't be worth switching anyway.

    Fine with me and I hope the same applies to broadband/tv/phone packages, bank saving rates, water bills . In fact I hope that all our utility bills are on single tariffs and there will be no need to switch except for dire customer service issues. Imho, I have spent a good few years of my life just switching and its a pain in the derriere!!!
  • tgroom57
    tgroom57 Posts: 1,431 Forumite
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    This article is meaningless - even Martin's contribution - unless you specify how many kWh are used to work out the "typical usage". There are those of us who know our way around a calculator, and it would be a simple matter (for me, anyway) to calculate a proportion of "typical usage" -if only I knew what number they are using !
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