To be worried about the number of people who think a ‘fixed’ energy tariff means the monthly price will always be the same - regardless of usage

[Butterflyfluff]

I know there are loads of threads about energy costs at the moment but I have noticed there are quite a number of people who think a fixed price tariff operates in the same way as say a monthly Netflix subscription.

With Netflix, you pay the same each month regardless of how much you watch.

With energy it is only the unit price you are fixing - your monthly bill will vary dependent on usage.

The terms ‘fix’ and ‘cap’ are causing a lot of confusion.

Instead, regulators should set an actual price cap on
a) maximum standing charge/day
b) maximum price for kWh

This is literally exactly what the price cap is!

I'm worried too OP - or maybe concerned is the right word if worried isn't.

I want people to be okay this winter, and I don't want people to either reject good fixes because they're "too expensive" i.e. the forecast usage is too high, or accept them and get a horrible shock when they submit a meter reading.

The same way I'm worried that some people won't be able to afford to heat their houses at all, or that more people will need food banks.

Surely they have bad credit, because most banks' SVRs are under 4% at the moment

Just goes to show how confused I am

I mean the way it is being communicated, eg

“Ofgem has announced that its price cap will rise to £3,549 from October 1 - this is up 80% from the current figure of £1,971.”

This might be (mis-)understood as “the maximum anyone will pay is £3,549 per year”, which is not at all true of course.

Sorry that was in response to @Eastangular2000

Oh I agree re the reporting, it is dreadful!

In the days of switching and going to a new contract my supplier reps thought I was crazy because I was asking for unit rates and standing charges. They obviously usually used an attractive direct debit arrangement to convince people and not mention these, which are the only figures which matter. People are the same with cars; they know the monthly cost but often have no idea how much the car was and interest are actually adding up to.

Agreed. It should be showing units straight away AND use the words "...so the bills for average households rise...."

I've just had a conversation with a family member about the £400 energy rebate over winter and he hadn't even heard of it! He doesn't watch mainstream news, read papers or have the internet so I often forget he doesn't hear about this stuff.
On a different note, we just happened to be telling our friends that we did an overpayment on our mortgage and also switched early to get a cheaper fix for 5 years. They all couldn't understand why we did it, even though their mortgage term is coming to an end soon they aren't even thinking about rate increases. And one of the friends earns a good wage yet has never thought to overpay the mortgage! They thought it was really odd that we did an overpayment.

I agree plus the number of people who think that by cutting back on energy they'll be fine. When in reality even cutting back to the bare minimum won't be anywhere near enough to combat the massive rises .

I think some of that though is that traditionally the energy companies have been pretty spot on calculating the DD required to pay the bill & not too much more, much under, then they just change the DD so it gets sorted.

I don't know why energy companies & ofgem talk in terms of DD's. It's 'dumbing down'

it is rather baffling though, that people genuinely think you can use SS much energy as you want, but only pay a set amount.

did they not grow up in homes where they were told to 'shut the bloody door' or that it looks like Blackpool illuminations & do you think I'm made of money, turn the heating DOWN....

Each new thread seems to bring at least one person who doesn't understand how it all works, I'm happy to keep explaining (and there's plenty, in turn, that I know Jack shit about!!) if only one person per thread goes away a bit more clued up, it's all good.

but like you, I'm Puzzled at how some people have come to think this way?!

So what would you have them do?

Not difficult to see how we got Brexit is it- yes plenty understood the downsides - but so many people who sleepwalk round about life in general politics, world affairs, bills, mortgages etc!! In some cases it's people with reasonably responsible jobs too

@ThankYouSir I worry that people don't understand. I don't understand why some people don't care about others. I suppose it's just ones nature, to be caring or not?

I am actually quite shocked if I'm honest at how little some people were paying- !! Even in a 1 bed flat I've seen people saying they were paying £70 dual fuel- seems really low to me- I think that's part of the shock. I was paying £230 before we went abroad for 20 months , now back and paying £280 but a way better insulated house.

We have 2 in 3 bed and were not on cheap fix and paid under 60 in summer and under 80 in wimter. +/- some change

Actually less!

@ThrallsWife on another thread I’ve been working out how much appliances cost to run. Some people have commented that they wish this was taught in school - but I know how to do it because we were taught in school! I even remember the science lesson where we worked it out. I thought it was a fairly standard part of the science curriculum.

Exactly. I've lived in my house for 3 years and used roughly the same amount of electricity each year (No gas supply). My usage has on average remained similar. I can see the last 14 months usage on my smart meter and further back online to compare. There are no significant lifestyle changes that mean I will be using more electricity. Therefore, I'm confident that the predicted usage given by my supplier is accurate.

Yep!

Also the number of people who are panicking thinking that the price cap means their bills are going to shoot up to £4,000 a year or whatever it is being quoted by the media......

No, the cap is on the unit, so if you're already a low energy user (like me) your bills won't go up to anywhere near that!!!!!

I'm the other way. 3 of us in a 4 bed (granted, mid-terrace) and we were on £80 a month. Even running a dryer every day wouldn't have taken us to £200. We never had the house above 19/20 though.

It's a lot more now obviously.

Yes! The amount they're quoting is going to be massively different from house to house.
I go by the unit and standing charge prices and what I've paid in the past.

Nobody using mains electricity is using green energy (in fact, more accurately, we all use the green energy). The electricity coming through the wire is all the same. If you pay for a green tariff your electricity is the same as your neighbour on a standard tariff, your provider is just paying green credits on your behalf.

So there is no reason why the rates won’t also rise on green tariffs I’m afraid.

I think that what the OP is referring to is the people who think that they’ve signed up for an ‘all you can (h)eat’ type deal and will change their usage accordingly. For example, a poster on a different thread mentioned overhearing people at the hairdresser saying that they’ve fixed their payment and so were going to leave the heating on all the time and invite the whole family over for a roast dinner every Sunday! Those are the people who will get a very nasty shock when they end up massively in debt. I have to say that I’m a bit concerned too and hope there’s not many people who think like this

It's the way the news is reporting it that is the problem.

We have all seen the headlines that the average fuel bill will be X after October and people who spend a lot less than average will be panicking.

It took me ages to find the % increases, I then had to spend ages going through my Scottish Power bills to find out my KWH usage (they only give it for each month so I had to go through that graph and add it all up to get last years usage) to try and work out what my new bill will be.

My electricity usage was only £50 on average last year so I'm hopeful that I will be ok over the winter with the £400 from the government taken off my bill. I have no idea what will happen in the spring but right now I'm just concentrating on the next few months.

My gas bill is separate so still trying to work that one out.