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Gas and Electric price hikes - capping ... Is it worth it?

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Gas and Electric price hikes - capping ... Is it worth it?

Every time the utilities hike the price, we are badgered into capping the price for (say) 2 years at a fixed rate.
This seems "like a good idea at the time".... BUT... is it worth it....?
e.g. the price of electric and gas goes up by 15% this winter (example)... and you cap your present price hike to 15% for 2 years .... OK... seems like a good deal..
6 months down the line,... up it goes again by (say) 10% and then again the next winter by another 10% ... now your 2 years look pretty good...
now your 2 years of capped price have run out, and the increase is due again... so now your price increase is  (possibly) 35% or 40% on the price before you capped a couple of years ago..
The above is an imaginary scenario...... but I wonder how true it is in real life..... anyone got any experience to say if capping is a good idea or not?
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Re: Gas and Electric price hikes - capping ... Is it worth it?

I would say YES.
The way the market is going, any price cuts will be short term and probably NOT passed on.
I have been on a capped cost for past 2 years, just came to the end of it this month, my new capped will be 25% DEARER. BUT the current cheapest is 20% dearer.
nadger
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Re: Gas and Electric price hikes - capping ... Is it worth it?

I agree that capping is a good idea.
Best deal we ever had was when British Gas did a 5 year cap a few years ago - mind you it really hurt when it ended and one saw how much prices had risen over that period  Cry
alanf
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Re: Gas and Electric price hikes - capping ... Is it worth it?

Three years ago I went for a 3-year fix as although prices had just gone up there was great uncertainty with Russia restricting gas exports etc. Within the first year prices went DOWN and I think are only recently reached the levels at which I fixed. British Gas's next offering is a fix for two winters (c 18 months from September) after an enormous price hike which hopefully won't be repeated before Winter 2011/2012. So one would be paying a premium this winter hoping to save money for winter 2012-13.
Are there "capped" deals? To me that means prices cannot exceed a maximum but can go down unlike with "fixed" deals.
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Re: Gas and Electric price hikes - capping ... Is it worth it?

I don't like big hikes in fuel prices at the end of a cap. I would prefer to be eased into them over a much longer period.
Also I'm not sure I trust the supplier not to charge me extra to recover their loses on my account.
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Re: Gas and Electric price hikes - capping ... Is it worth it?

Quote from: Strat
I don't like big hikes in fuel prices at the end of a cap. I would prefer to be eased into them over a much longer period.
Also I'm not sure I trust the supplier not to charge me extra to recover their loses on my account.

Spoken like a true Yokshuman..... and echoing my views perfectly.....
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Re: Gas and Electric price hikes - capping ... Is it worth it?

Hmm.
Pay say £100/month for 12 months = £1200 then pay £140 (assuming new cost)
Or
Pay £100 + £110 + £110 +£99 + £105 + £120 etc ending up with £140/month
I know where I would go. (And did)
There is no way for them to  "charge me extra to recover their loses on my account." if you are on a fixed price then that is what you pay until it finishes.
If they try to increase the cost then they have broken the contract and you are free to move to a new supplier. The ONLY reason I moved suppliers this time was cost. They were £10/month cheaper than the cheapest I could get with my previous supplier.
Its the same as you buying in bulk. You pay (say) £12 for 4 items instead of £4 ea (Tesco's 4/£12 deal). With this you are contracted to them for 1/2/4 years and unless you pay a fee are fixed - they can "budget" on you using x amount  over the year knowing how much to buy in bulk.
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Re: Gas and Electric price hikes - capping ... Is it worth it?

Capping was always a con to draw in the customers and try to sway them into thinking they'd got a deal. The reality was that it gave the companies an excuse for putting up the prices under so called rising costs. They're all at the 'capped deal' knowing full well they can claim they're helping the customer when the harsh reality is they're doing the opposite.
From the customers POV you're not left with much option because if you don't cap it you'll pay more but if you do cap it you're still playing into their hands.
I need a new signature... i'm bored of the old one!
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Re: Gas and Electric price hikes - capping ... Is it worth it?

But at the end of the period......" Nuclear Bomb "   or "journey into space"....... comes to mind...   Cheesy
the prices rocket up.... as strat says... rather have a small(?) periodic increase and get used to it, than be blown out of this world at the end of the period...
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Re: Gas and Electric price hikes - capping ... Is it worth it?

So you would rather pay through the nose CONTINUOUSLY rather than shop around when your deal finished  Crazy Your choice not mine. With my deal I know what I will pay for next 2 years, In 2 years time I will still be paying the same as I am now, but you could be paying ££££ more for those 2 years where as I will have to move deals then and only then pay the extra £££'s.
With my previous supplier (Eon) I could (and did) move to more economical tariff’s as they became available whey staying on a capped limit. (e.g. my previous fixed rate used to give me a discount that paid for my gas use during the summer months)
I know none of us like the way costs are rising, but why play (& pay) along when you could say no I will pay this for the next year (or 2) and then if it has gone up then it will cost me more.
Have a look at the Money saving expert web pages for more details but they recommend fixing now rather than hoping costs will stabilise.
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Re: Gas and Electric price hikes - capping ... Is it worth it?

Got a fixed deal with Scottish power that expires in November 2012.  Part of that deal was a guarantee the price would not be increased in that time but if prices dropped then they would also apply to this fixed deal.
This has turned out to be a good move as prices are about to rise by 20% but Scottish power have contacted me to say these rises do not apply to me.
The price comparison websites are (in my opinion) just a big con, a provider will offer the cheapest deal and then months later up the price so other providers are cheaper, you would need to switch 3 or 4 times a year to keep with the cheapest firm and this is an area where things can go badly wrong.........At my age I can do without the hassle !
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Re: Gas and Electric price hikes - capping ... Is it worth it?

I'm with EON and so far they haven't increased their prices but I guess it will only be time Undecided
pierre_pierre
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Re: Gas and Electric price hikes - capping ... Is it worth it?

dont give up just got this
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Re: Gas and Electric price hikes - capping ... Is it worth it?

I usually check the prices AFTER they have ALL gone up, and then switch accordingly..... however, if the annual saving by switching is only a small amount, say less than £50 then I don`t bother, I can absorb the £1 per week.. however, my original question was about the "longer term" contracts, where after it finished, the price difference was huge, compared to the orginal price 2 years ago..
.
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Re: Gas and Electric price hikes - capping ... Is it worth it?

For electricity I'm with E.On, I've just received a 'price rise' notification in the post.
Although the press release says rises of 11% http://www.bbc.co.uk/news/business-14417391
Mine has increased by an average of 22% over all 3 bands  (first unit, next unit and night rate).
Time I shopped around, anyone have any experiance with OVO  http://www.ovoenergy.com/