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Fixed my energy last year for two years, just before the energy price guarantee/discount came in. The price I fixed at turned out to be about 2% over what the price guarantees have been since then, so that scheme gave me a tiny rate reduction down to the price guarantee level.
Now the scheme is over, my fix is way more expensive than current rates. As it happens, due to hefty exit charges it's not worth switching to an SVR or cheaper fix.
So I had essentially zero benefit from the price guarantee scheme, that scheme nullified the benefits of me having taken out the fix, and now I'm left paying significantly over the odds for the remainder of the fix. The latter one I am fine with because that's the bet we accept when signing up for a fix.
The supplier has as would be expected kept their part of the bargain. That they might profit or lose depending on market movement is something we expect when signing up to a fix; consumers offload risk to them.
The government designed the scheme as a price level rather than a fixed discount, so the cost to the taxpayer was less for households that had taken out a fix.
Meanwhile households who didn't have the forethought to fix benefited fully from the guarantee scheme, and are now paying low market rates. Did fix - no government subsidy, now pay higher prices. Didn't fix - received government subsidy, now pay lower prices.
I think my bugbear is with the way the government designed the scheme. I paid for something that limited price risk. Their scheme removed that risk, so the thing I paid for was now unnecessary. People who didn't pay to limit their price risk, didn't pay for that thing, and also got a big chunk of government subsidy.
Is there an unfairness here or is my thinking off?
And it did limit price risk. If the price guarantee had been set higher than your rate (as it nearly was, there was supposed to be £500 extra), you'd have paid the lower rate. It wasn't, and you benefited by not as much as much as you might, but I can't see where you lost anything because you never had it in the first place.
You also did get the £400 of subsidy I assume?
Who to be cross with? It's a gamble and you lost out so I guess you. WRT didn't have the foresight to fix..... there were enough people campaigning at the time that I thought Gov would be forced to do something so that was my gamble, which this time turned out right.
Sorry, you did ask.
With fixed tariffs you're in effect paying a premium to avoid the risk of price volatility. They don't guarantee it'll be the cheapest tariff in the long run. You paid for the certainty. It doesn't necessarily mean you've been ripped off.
It's just like fixed Vs tracker mortgages. Some people 'win' by fixing at the right time, others 'lose' and would have been better off on a tracker.
Most of the advice at the time was to stay on the variable standard rate for the reasons you mentioned.
As for bugbear with the system - it's that everyone got the subsidy and the benefit (however small) of the EPG, and it should have gone disproportionately to the lower income households that needed it.
forethought to fix
Not everyone wants too or is a position to fix. In this case you gambled and lost. Those that didn't fix gambled a different way and won.
Personally I don't think there should be any fixed energy tariffs. There should be social tariff at cost for those who really need it (i.e. low income, benefits etc). Everyone else should pay what it costs at the time.
In relation to your personal outcome, it’s no different than if the price of energy had fallen after you entered the fixed price contract. You entered the contract to ensure you received your energy at a certain price and that is what you received.
With regards to others who “didn’t have the forethought to fix”, many were on fix price contracts, which then expired during the period that the standard variable tariff (with the price guarantee) was to lowest price in the market.
Literally just popped up in my twitter feed
https://twitter.com/MartinSLewis/status/1676186650504822789
seems actually you may have been 'lucky' if the EPG was applied to your fixed rate as some are saying that was only actually a guarantee for variable rate deals. FP was FP.
I think my bugbear is with the way the government designed the scheme. I paid for something that limited price risk. Their scheme removed that risk, so the thing I paid for was now unnecessary. People who didn’t pay to limit their price risk, didn’t pay for that thing, and also got a big chunk of government subsidy.
I spent £20k on a solar install in an attempt to fix my energy prices, then the government swooped in and started deploying help and fixing prices and the flipping energy price had the temerity to go DOWN? How am I supposed to get my money back in short order now?!*
*I'm not actually saying this, but my calculations on return on investment were based on prices in March of 2022, lots of things changed between then and now, but I made my choice. Had you invested in something physical (Car/house/insulation/etc) would you be going back to the person who sold it to you demanding money back because economic factors that led you to that decision had changed in the year since you made it?
I can’t see where you lost anything because you never had it in the first place.
I didn't, but I paid for something that was rendered unnecessary.
Who to be cross with? It’s a gamble and you lost out so I guess you. WRT didn’t have the foresight to fix….. there were enough people campaigning at the time that I thought Gov would be forced to do something so that was my gamble, which this time turned out right.
Sorry, you did ask.
Yes, and as slightly alluded to in the title I was open to the answer being me. I failed to account in my gamble for possible government intervention and the nature of it.
With fixed tariffs you’re in effect paying a premium to avoid the risk of price volatility. They don’t guarantee it’ll be the cheapest tariff in the long run. You paid for the certainty. It doesn’t necessarily mean you’ve been ripped off.
This isn't what I was taking issue with, I understand the premise of a fix.
As for bugbear with the system – it’s that everyone got the subsidy and the benefit (however small) of the EPG, and it should have gone disproportionately to the lower income households that needed it.
Agreed. I think the crux of the annoying thing is that lots of people that didn't need it benefited from doing nothing, and I didn't. I'd even think that lower income households might be the ones more likely to take a fix because they have less/no room in their budget to risk uncapped market prices.
In relation to your personal outcome, it’s no different than if the price of energy had fallen after you entered the fixed price contract.
Yes. The reason it happened is what was grating me. The government rewarded people who either didn't take responsibility or that expected the government to come to their rescue.
Had you invested in something physical (Car/house/insulation/etc) would you be going back to the person who sold it to you demanding money back because economic factors that led you to that decision had changed in the year since you made it?
Generally no, but yes in the case of the government causing an unstable economic or regulatory circumstances for making investment decisions.
So you made a choice it did not work out for you, then come to forum to complain.
Meanwhile households who didn’t have the forethought to fix benefited fully from the guarantee scheme, and are now paying low market rates.
Low market rates! Where can I find these low market rates!!!???
Yes. The reason it happened is what was grating me. The government rewarded people who either didn’t take responsibility or that expected the government to come to their rescue.
What are you on about - I always used to have fixed deals. My fixed ran out in April last year and there were no fixed deals on the market (or really bad ones). It's was SVR only. I'm still on SVR.
I can see why you're grumbling, but no, it's a gamble either way and you lost out.
Personally I gambled that the 'peak' would be lower/shorter than was being priced into the fixed rates which inferred it was some sort of new normal. Conversely I did fix my mortgage just before Truss-enomics/ageddon! But I also fixed the last 7 years and dread to think about how much that's cost compared to the crazy low variables being offered (back of a fag packet it was 7 years on the term!).
Did spend time and money on insulating the house and replacing the heating controller instead which will pay off every winter.
As for bugbear with the system – it’s that everyone got the subsidy and the benefit (however small) of the EPG, and it should have gone disproportionately to the lower income households that needed it.
i fixed in Oct 21, literally days before prices went silly. I still got the subsidy so for a while I was paying £120 per month combined gas and electricity for a five bed house with three teenagers in it. Never paid such cheap energy. I was happy to take the saving but I suspect if they had more time to design the subsidy they wouldn’t have done it like that.
Is there an unfairness here or is my thinking off?
I can obviously see how that's bloody annoying, but it's a bigger unfairness to people like us who are stuck on prepayment for no good reason (been on DD for 30+ years until we moved) and have no options what so ever.
The government rewarded people who either didn’t take responsibility or that expected the government to come to their rescue
I fully took responsibility - I stayed on a variable tariff, and would have handled the consequence of that decision whichever way it went (in parallel I spent over £4k on a new efficient boiler etc to mitigate further price increases) - it looked foolish to me to be fixing at exceptionally high/unprecidented prices for any length of time late last year, it'd kind of be like fixing your mortgage at todays high rates now - that also looks foolish to me - the boat has sailed for fixing rates.
You just need to suck up the fact that your gamble went the wrong way - for now at least -maybe in the near future your decision will be proved the most prudent - who knows.
What pence per kwh were you paying OP. Ignore the price fix as folk get confused.
Its been about 9p kwh gas and 32p kwh for electricity for the last 12 months
I agree that the home energy market has been a mess for the last couple of years. Old Martin Money Saving Expert has been saying so and advising all to sit tight as there are no winners or good deals - just cost.
(That said, we signed up to a fixed deal just prior to it all kicking off / EPG and have treaded the needle on a Good Deal which runs out in August. We've upped payments and built a buffer of credit, fully expecting +50%-100% rise in costs from September.)
Meanwhile households who didn’t have the forethought to fix benefited fully from the guarantee scheme, and are now paying low market rates. Did fix – no government subsidy, now pay higher prices. Didn’t fix – received government subsidy, now pay lower prices.
Literally ALL the advice I saw being given at the time was to stay on a variable rate.
In this case you gambled and lost.
This I'm afraid.
Meanwhile households who didn’t have the forethought to fix benefited fully from the guarantee scheme
Quite a few including myself did have the forethought to fix only for the supplier to go bust. I’m annoyed but took the advice to stick to variable pricing with new supplier.
As others have said above, the sensible thing to do in the past was fix, but then of course as soon as the wholesale prices went up, all the companies with the best deals went wallop and we all ended up on support of last resort on SVR.
as I recall, there was plenty advice from Martin Lewis and every analyst on the news that all said “don’t fix now, no good will come of it” and all the sensible people with forethought and responsibility took sensible and thought out action and stayed on SVR
It sounds like you acted recklessly and against all sensible advice and locked in terrible terms. But you still think you were the sensible one?
So you made a choice it did not work out for you, then come to forum to complain.
It's a bit more complicated than that isn't it, hence the discussion.
Low market rates! Where can I find these low market rates!!!???
Granted, lower rather than low.
What are you on about – I always used to have fixed deals.
I fully took responsibility – I stayed on a variable tariff, and would have handled the consequence of that decision whichever way it went
Apologies, I was unjustifiably harsh on people for who couldn't sensibly fix or had another plan. The point remains that the government rewarded some people and not others, based on criteria that was far from ideal - as discussed above.
I can obviously see how that’s bloody annoying, but it’s a bigger unfairness to people like us who are stuck on prepayment for no good reason (been on DD for 30+ years until we moved) and have no options what so ever.
Agreed, and my sympathies.
You just need to suck up the fact that your gamble went the wrong way – for now at least -maybe in the near future your decision will be proved the most prudent – who knows.
I'm ok with my fix gamble going the wrong way, and always knew it could. What I didn't account for in my gamble, was that the government might step in and change the economics of the gamble thus making it an unnecessary gamble. My gamble went the right way in the economics at the time I took it.
Literally ALL the advice I saw being given at the time was to stay on a variable rate.
as I recall, there was plenty advice from Martin Lewis and every analyst on the news that all said “don’t fix now, no good will come of it” and all the sensible people with forethought and responsibility took sensible and thought out action and stayed on SVR
It sounds like you acted recklessly and against all sensible advice and locked in terrible terms. But you still think you were the sensible one?
At the time I was doing mine (which might be different to when you did yours), it was to consider fixes up to 40% over the price cap, or 45% if you valued price certainty - which I did, so I fixed at 42% over.
I don't blame Martin and others for the advice - the government changed the game. Some people benefited, I wasn't one of them, some didn't need it, some needed more but didn't get it:
As for bugbear with the system – it’s that everyone got the subsidy and the benefit (however small) of the EPG, and it should have gone disproportionately to the lower income households that needed it.
So what's the verdict? Still you gambled you lost, or are you aiming to lay accountability elsewhere and to what end?
Gov's not going to rewrite their EPG scheme to compensate you, write it off, move on.
Yes, I gambled and lost on the fix, and I'm responsible for and accept that, as I said in my original post:
now I’m left paying significantly over the odds for the remainder of the fix. The latter one I am fine with because that’s the bet we accept when signing up for a fix.
Some replies here seem to be addressing a complaint of a fix not working out, which isn't what I complained about.
As you pointed out, my fix didn't lose me anything. And also that I didn't consider that the government might step in and do something (as they did) that would make my gamble less necessary - this was my miscalculation.
The verdict on the EPG, which is obviously a done deal, is that it was flawed in who it benefited. People benefited less if they'd already secured a price themselves, and there was no consideration of need (as you pointed out).