Soldato
It's probably more if you really looked into it. Tax, NI, tax on tax etc etc
Energy Prices (Strictly NO referrals!)
- Thread starter DXP55
- Start date
That's my take on it really. It's a 2.5x increase on my existing DD which is absolutely bananas (was expecting 50 - 80%, not 150%), but knowing that I'd end up with a massive increase come November would be a nagging worry for me.
Soldato
This is the issue.
If your well off monthly/quarterly in arrears is fine.
If your living more hand to mouth the temptation is always there to just make it up next month which if course will never happen. Approaching winter and bills going up 300% when you were struggling when bills were cheap.
But as ever we are looking at the symptoms and not the causes.
Soldato
But again, a lot of (not 100% admittedly) was caused by the governments price cap.
Few of these businesses had any issues until the energy prices went crazy. At that point the survivors are mainly those with old legacy ways of working, longer term contracting etc
These same businesses were often towards the top end of the price comparison charts, and losing more and more customers each year.
Now dont get me wrong, I think the industry as a whole was/is a mess. But you cant blame the companies only when they were literally being forced to sell gas and electric below the price it was costing them to buy it.
How many businesses would last long in any field forced to do that....
The main problem remains that the cap is fixed for too long and cannot react to an adverse market fast enough.
Long term fixed contracts were also fine when the market prices were pretty darn stable and predictable, they cant really function when its not.
Go back 20-30 years and virtually no one had a fixed price, they basically didnt exist. We now think of them as the normal for a savvy consumer. I suspect they will become fairly rare again as companies will be pricing them very highly due to risk.
if your electric and heating/hotwater are separate then you can put electric as whole amount DD and not get fleeced.
most people probably use less electric in the winter as they won't have fans blowing air around, and your fridge/freezer won't be turning on as often etc
unless your crazy using electric heaters instead of radiators
Soldato
Most peoples electric is slightly higher in the winter, but its far less volatile than gas.
Generally more lighting, leaning towards more cooked food etc
Its very much lifestyle dependant however in regards how volatile ones own usage will vary.
ahh yea lights... I usually sit with black out curtains drawn in the summer and a light on anyway
because the suns too bright, or in the evening not bright enough.it can't be a big difference though
I'd say the tumble drier is the biggest cause of increased electricity in winter. My usage is pretty consistent throughout the year, the only changing factor is how much I need to use the tumble drier (family of 4, my house would look like a kids fort 24x7 if I tried to dry all the towels, bedding and clothing we generate every week without a drier)
Associate
I'd be interested to see some figures relating to customer bases of these businesses, as you've suggested fixed pricing tends to be associated with the more savvy customer that shops around for the best prices. So it would be logical to assume that most customers moving around and end up on new entrants to the market would be on a fixed pricing? If this is the case why would the price cap being slow to adjust vs market conditions affect a company whose bulk of the customers are on 1year+ fixes?
prices weren't fluctuating 20-30 years ago , we didn't have non-flexible wind-power generation without a flexible generation component, just the miners, whilst at work.
(obviously) reduction of cap cycle to 3 months may accompany october rise, but industry&consumer needs some price stability, otherwise economy would have inefficiency of results of continuous changes (imagine if that wasn't true for ... buying an airline ticket, iron ore, wheat , pint of milk ....)
Soldato
Not all customers will have fixed at the same time, so there will be a constant churn of e.g. 8.3% of customers renewing every month.
You're also mistakenly assuming that most customers are "savvy".
Take my mother in law for example. She complained she was paying too much so I did some research and moved her over to a really good fixed rate paying about 40% less than she was on with her current variable tariff. A week later she comes to visit and tells us very proudly how she'd decided to stay with her old supplier because she'd had a call from a nice young man who had offered her a new deal with them which was about 10% cheaper than her old rate (but a lot more than the rate I put her on).
I still dont understand that, if you pay quarterly in arrears only for what you use, you pay less for 9-10 months of the year (going by some recent posts on here it can be around half per month you pay). Plus on top of that you pay "after" the usage not "before" it. It got revealed on here companies are deliberately not advertising variable direct debits and someone who works for one of the companies got told off for telling customers about it. If customers were worse off on variable, then thats what the companies would push instead of monthly fixed.
https://forums.overclockers.co.uk/posts/35515547
Caporegime
Cost of living in France is a lot cheaper though (a quick Google suggests 10%) and Germans on average earn more money than us to make up for the tax.
Soldato
Its for sure not the whole issue as i said, they were all offering fixed deals.
The new entrants typically had a different model that generated lower cost in the good (normal) times. When the shock came they had the situation that where people who were falling off their latest fix would have gone onto variable and at least they would see some profit, basically every customer was being sold to at a loss.
If you can see a short tail that would move the vast majority onto a positive income over a period of time you have some hope of borrowing your way out of the issue. If there is no improvement in sight you have zero chance your going to get funded to see it out.
As far as I know the rates went variable (ie cost to resellers) the moment it was nationalised. The issue I think is the costs were far more predictable with high baseload of coal & nuclear. Plus the excess has got lower and lower so each round of negotiation those willing to hold out for a higher price as suppliers of last resort to the grid will see more and more action.
Its government failure more than anything else, repeatedly.
Associate
If we take the half way point 12 month fix, then at any given point half of the fixed customers will be on a renewal of 6 months or longer, in which case shortening the period of price caps review is not going to affect the providers ability to raise prices for those people. So lowering the review period gains less and less for companies whos primary customers are on 12 month fixes.
In regard to customers being savvy, i'm not sure you read it correctly. The assumption is based on the comments of the person i quoted and is not about all customers. It's about customers with relatively new to market energy providers which would tend to compromise of people that are savvy due to the fact they are switching regularly to obtain the best prices (because why would you switch to a provider that didn't give the best prices?) and then their comment about savvy people being more likely to be fixed. Which your example seems to reinforce as yourself recommended a fix to your mother?
Soldato
- Joined
- 16 Aug 2009
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Germany also has lower VAT than us last time I looked. Our income tax may be lower but I'm pretty sure we pay more through other taxes. There is literally no reason to cut income tax and fuel duty other than to hand money to higher earners as its a larger proportion of their income, lower earners will be paying proportionately more for energy and other essentials.
customer churn was discussed in this primer doc amongst the (LOL-ex)prosumers but represents inefficiency/unhapiness in the market, everyone paid, crazy.
... but it's all over now
https://www.cornwall-insight.com/wp...nsolidation-in-the-domestic-energy-market.pdf
... but it's all over now
https://www.cornwall-insight.com/wp...nsolidation-in-the-domestic-energy-market.pdf