Will we really see bills stay below the ridiculous Oct prediction?

[pinkyponkyplink]

Is this actually going to be happen? We have been worried sick about affording £400 and £700 a month predictions. It would make a huge difference to us! Just can't actually believe it might not happen after all the worry!

She is making an announcement on Thursday and the press are convinced that she will say that the price cap will mean average bills of £2500 for 2 years.

I’m wondering the same OP. We were paying £100 per month for several years, now up to over £200. We could afford £350 but £600+ would severely affect our lifestyle.

The 'leak' is everywhere, with pretty much the same details.

If she doesn't do it now, it would be catastrophic for her reputation. I can't see how it can not go ahead.

The element that isn't totally clear/alligned is how long the £2500 cap will apply for. Most are saying about 18 months but there are still some saying 6 months and others saying 2 years.

Whether she can also do the other things she promised: get rid of the NI rise (but keep the threshold at the higher point?) and lower VAT remains to be seen. That's a LOT of money.

I hope whatever she decides that it eases the terror of unaffordable bills for many.

However, I also believe a lot of the decisions (which hopefully will help) are a form of psychological torture. You know, get them to think it will be minimum £6,000 pa, but we will reduce it to say £3,000. Folk will sigh with relief, BUT the bills will still be astronomical.

I know energy prices are going up all over, but the amount of fear engendered by this up to now has been unreal. Do you see what I mean if prices are capped or will be lower than expected? I am a cynic, hands up!

So £2500 is still higher than the current cap of £1900? But better than it could have been I guess. But still unaffordable for some.

plus what about businesses which aren’t covered by the cap.

How are they going to work this cap out, will it be the same for everyone, or based on house size / occupants?

We’ve always paid around £200 a month (3 bed, 2 adults 2 kids) but have just had an email from Ovo wanting £445 a month from October. Can’t really afford that.

Press are reporting that businesses will also get a cap

It's capped in terms of the price they can charge per kW, that's my understanding anyway. Rather than someone in a mansion only paying £2500 max a year

So will Ovo, for example, have to backtrack on the £445 they want from me, if Truss makes this announcement tomorrow? I was going to call them but maybe better waiting?

The £2,500 will include the £400 rebate.

So essentially, the new capped kWh price will be a little more than April's, but a lot less than October's.

It'll work the same way the Ofgem cap works. By KWH. What that means for each person will depend on how many kWh they use - much as it does now.

£2500 is the average price for the average house. It's not the maximum anyone will pay. If you use more than average you pay more than average. I wouldn't be talking to any energy supplier nor changing any direct debits etc until the announcement is made.

The expectation is that she'll leave the £400 rebate in place too making it an average of £2100 in real terms. At least for this winter.

She also said she'd pause green levies. Whether she does this as well remains to be seen. But that would take the average down to £1950 ish. Which is around where it is now.

God, still so many people after all this time thinking that a price cap means all inclusive energy for a fixed cost. It seriously worries me how many people still think this.

Agree, this language choice is seriously failing.

Agree, this language choice is seriously failing.

It really is. The whole setup needs futher demystifiying - by always using this top level 'average' price, people are actively dissuaded from understanding price per kwh and to understand their own kwh usage.

IMO, the standing charge should be ditched and added into the per kwh price. And the per kwh price should be the same all over the country, not vary by region.

Then we could talk about the gas and electric per kwh price caps simply - and people would be encouraged to relate those caps to their own usage to figure out what they need to pay.

It has been really badly reported with pretty much all the mainstream media leading with the average household rather than the actual price cap followed by an explanation of what it might mean for different types of household.

The cap for the typical use amount of energy is £X, Martin Lewis is on TV and radio very regularly and I don't think I've ever heard him say the words 'price cap' without also including 'typical use' in the same sentence.

Once the new system has been announced, the calculators on the internet will be quickly updated to allow people to put their own usage figures in to work out what they might be paying, but until then, people have to have a little think about how they may compare to typical use, or compare the amount they use, which is given on their bills in the 'your estimated annual usage' section.

Common sense indicates that if you are a single person in a one bed flat, you'll use less than the cap and if you are a large family in a 5 bed detached, you'll use more.

Yes, please, please EVERYONE PUT THE WORD AVERAGE BEFORE £2500 every time.

It terrifies me how many on MN are misunderstanding this, despite the hundreds of posts explaining it. There must be millions out there thinking this'll be all they have to pay no matter how much they use.......

The problem with the Ofgem announced price caps that fails to be appreciated is that

1. they are for the average user
2. they are a cap - these are the max price per units that suppliers can charge. In theory if wholesale prices came down suppliers could offer lower prices- although whether this happened to the full extent of the wholesale price drop and how quickly is another question.
3. they assume that demand will stay the same when in reality at these eye watering prices demand will reduce and at these prices any gas producer will be pumping as much gas as possible.

The reduction in demand and increase in supply would in turn cause prices to fall. Or as the saying goes "the best cure for high prices is high prices".

Be nice if does

thinwas this all a ruse. We all get worries and panic as prices so high

lIz comes on board and say no this won’t happen

everyone thinks she is god
……

The easy way to explain the price cap is by using hypothetical petrol price as an example.
The petrol companies have a price cap of £2 a litre.
The price cap for the average driver is £2500 a year. The MSM keeps saying £2500 a year price cap BUT……. it is £2 a litre.. So if you only use the car to pop to the shops you will spend less than £2500a year, if you are a rep who travels for a living you will pay more BUT… you will both be paying a MAXIMUM of £2 a litre.
Reading that back I think it is a shite example… but I know what I mean 😀

Totally agree, people will now be relieved if it “only” rises by 25%.
If it do happen then think of all the people who have been shafted by going on fixed rates to beat the rise. They will be facking fuming.

If it do happen then think of all the people who have been shafted by going on fixed rates to beat the rise. They will be facking fuming

I genuinely think they should recalculate people's bills at the April 22 price cap for anyone who has signed up to a higher fix since then, because there has been so much fear (quite rightly) about how much bills were going to go up people have done what they thought was best before the goal posts were moved.

I'm slightly miffed because we've paid about 15% above that level all summer, to protect us from high price rises over next winter, but in reality we've probably not paid a huge amount extra, but some might have overpaid by hundreds of pounds unnecessarily.

I think your petrol analogy is good.
I would prefer it if the media used say 3 examples for low, medium and high energy users.

Not everyone lives in a mansion but plenty of people use more and many use less than the mythical average.

It’s also quoting a figure to the last pound that’s annoying.
They just need to say what the cost per KWh will be under the new amended cap.

I’m also concerned what will happen at the end if global prices are still through the roof.

Yes, whilst I'm very very pleased for people on variable tariffs, genuinely, I'm wondering how much worse I'll be off having taken the risk and fixed.

plus, NOTHING is free, we will
ALL end up paying higher prices for longer to pay it back. Lizzy doesn't have a magic money tree. WE are paying for this NOT lizzy or 'the govt'

so likely I won't get any benefit from fixing, But I'll also end up paying towards the 'help' as well.

not terribly happy.

Yep. It would be good if something was done. Mine is fixed at a reasonable rate, and I took the risk knowing the prices could go down (and so I'd pay more than the svr, but the Govt changing the goal posts is quite something else.

I'm trying not to mind, but...it is annoying me that I'll might have paid more during my fix and now also be expected to keep paying a higher rate to payback the cost of keeping it cheaper for those that didn't fix.