There should be a better way!

  • wildroverandy's Avatar
    Level 2
    I mean, deciding on your choice of tariff really shouldn't be such a lottery.

    As with everyone else, we're trying to get the best price we can at the moment, and we moved from the Next Flex to the Next Pledge tracker tariff V2. We got the email for the fixed tariff last December - Next Fixed V6, and after a bit of thought, and discussion (so we didn't just jump in), decided it might be worth switching to.

    The Next Pledge did have a get out fee, but only if moving to another supplier, so that was fine, it cost nothing to move to the Fixed rate.

    But they've changed that for the Fixed tariff, and it's £75 each even to stay within E-on.

    Of course at that time, we had no idea that it was likely the prices would drop at the next capping event, and we'd gone past any timescale for changing our mind by the time it had been confirmed.

    It just feels like the whole thing is a gamble, and this really shouldn't be something else we have to worry about. It kind of feels like we've been screwed over. Of course I appreciate that have the choices, but who on earth is that well informed right now? (perhaps the bean counters higher up in the company have some idea!)

    Hopefully the lower usage in the summer months might reduce some of the difference.

    I feel that you should at least enable us to undo an error of judgement, stay within E-on, and move across to a better tariff without penalty, especially when times are difficult enough for all of us.

    Cheers.
    Andy H
  • 20 Replies

  • Andy65's Avatar
    Level 45
    Hi @wildroverandy

    It is a gamble but, as has always been the case, it's really important to do a bit of in depth analysis of your own consumption to see what really is the best tariff. I've just switched to Next Secure Fixed 12mV5, and even though it has £75 exit fees per fuel for leaving or changing tariff, it was the cheapest tariff for me. Also, I think it's highly unlikely that gas and electricity will return anywhere near to what they once were.

    I looked at the Next Pledge Tracker but based on my average consumption over the last 4 years, I would only save £15 per year compared to Next Pledge, not £50 which is quoted for the average user.

    Reading your meters regularly and using a simple spreadsheet is what's needed to compare tariffs properly, particularly with the ever increasing Standing Charges. This is even more important if your consumption is not 'average'.

    No exit fees if staying with eon-next used to be one of their best features but that seems to have gone now, it's a business after all.
  • wildroverandy's Avatar
    Level 2
    Hi @wildroverandy

    It is a gamble but, as has always been the case, it's really important to do a bit of in depth analysis of your own consumption to see what really is the best tariff. I've just switched to Next Secure Fixed 12mV5, and even though it has £75 exit fees per fuel for leaving or changing tariff, it was the cheapest tariff for me. Also, I think it's highly unlikely that gas and electricity will return anywhere near to what they once were.

    I looked at the Next Pledge Tracker but based on my average consumption over the last 4 years, I would only save £15 per year compared to Next Pledge, not £50 which is quoted for the average user.

    Reading your meters regularly and using a simple spreadsheet is what's needed to compare tariffs properly, particularly with the ever increasing Standing Charges. This is even more important if your consumption is not 'average'.

    No exit fees if staying with eon-next used to be one of their best features but that seems to have gone now, it's a business after all.

    It was just a bit of venting really. In an ideal world, this shouldn't be a gamble, that's all I'm saying. These are essential services to a family home, and the cost of those services should not be down to a 'gamble'.

    I haven't even tried to work this out on a spreadsheet - really, do we all have the time, or even ability to do that (I do, but not everyone does).

    As it is, our costs are about bang on the averages, so we are near enough going to be effected by the amounts quoted.

    But, I've now got fixed into a higher rate, now that the prices are coming down in April, so E-on will be getting more money from me than if I'd stayed with the old tracker tariff.

    Yes, they're a business, but there is also a social responsibility aspect to their business too - they're a business and a public service at the same time. It's a combination that has its flaws for sure.

    Cheers
  • meldrewreborn's Avatar
    Level 91
    @wildroverandy

    The problem is that when we are given choices we may make what in retrospect may be the wrong choice, albeit for the right reasons. We are not forced to enter into fixed price contracts , and whether they will turn out to be the best or even a good choice will depend on future events that we cannot accurately predict.

    some customers have been charged exit fees improperly and have got them reimbursed. You need to check you terms and conditions as to whether you can exit your contract at no charge if you stay with Eon Next.

    Entering into a fixed contract carries risk, and if people are not happy to accept that then they should stick to variable price capped tariffs.
    Current Eon Next customer, ex EDF, Zog and Symbio. Don't think dual fuel saves money and don't like smart meters. Chronologically Gifted. If I offend let me know by private message, but I’ll continue to express my opinions nonetheless.
  • wildroverandy's Avatar
    Level 2
    I'm sorry, not sure if I was being too subtle perhaps. All this I know, it's not the point I was making.

    I know I had the choice, I know I am in a contract, I know I can't get out of it now (without paying £150 anyway), I know I need a better crystal ball too ;-).

    That's all not the point though. The announcement that the price might decrease only came a short while after I'd signed into the new contract.

    The point is not whether I should, or should not have gone with it. The point is whether is should even be offered at all - especially during such a volatile period.

    It's my suspicion that the big companies will have a much better idea of how the markets are performing, they'd certainly have a lot more data to work with, and much cleverer accountants at work than the average punter.

    As far as gambling goes, aren't the odds always stacked in favour of the house?

    Risks are for people buying shares to make a fast buck, not someone trying to heat their home.

    I appreciate this is just the way it is, but I'm simply questioning that.

    Cheers.
  • Andy65's Avatar
    Level 45
    @wildroverandy

    It's a gamble in as much as there are choices (of sorts) and it's down to the customer to ultimately decide for themselves.

    I use a spreadsheet because I record my meter readings etc but I could have done my comparison on paper in less than 10 minutes, and that's to compare 9 tariffs. For 8 of them the SC was the same so it's just a case of the annual usage and cost per kWh, so I'd say we all have time if we want to do it.

    The other important factors are the Standing Charges, which OFGEM seem to be keen on raising the ceiling on so don't just look at changes in the unit rates. I have more of an axe to grind with OFGEM rather than the suppliers, but that's just my opinion.
  • meldrewreborn's Avatar
    Level 91
    @wildroverandy

    Yes, all of these deals will represent profit for the supplier. A customer will only be able to evaluate which was the best option for them in retrospect- 12 or 25 months hence. But what you are arguing for is to deny the choice to other customers who will want to have the option to fix prices thus providing certainty in their budgeting.

    price drops this year had been thought likely - but nothing is assured - and world events are not at all predictable so the forecast prices were a guide for people to consider.
    going for a deal with an exit charge really should be considered a firm commitment. I had a fix for gas which I thought would serve me well when prices were going skywards but in the event the introduction of the Truss era EPG and its methodology cost me dear and I exited paying the fee. Earlier I had a deal for gas @ circa 2.5p per kWh that was scuppered when the wholesale supply to my supplier went belly up.
    None of these events has led me to think that lower price fix deals with exit charges should not be available. It’s up to us to choose and accept that we may get it wrong.
  • meldrewreborn's Avatar
    Level 91
    In general the time to fix is when prices are forecast to rise. Before the energy crisis hit it was noticeable that the availability of fix price deal would decline when prices were forecast to rise and increase when prices were forecast to fall. Whether deals were attractive or not depended on the amount of energy we use, the ratio of gas to electricity used, and the prices for units and standing charges.
    I would always prefer a fixed deal to a variable contract and prices stemming from the OFGEM price caps were to be avoided because they were actually very expensive. For the past 3 years that has changed and the price capped rates were all that were available. The return of fixed price deals is a sign that things are getting back to normal, although the demise of smaller suppliers has weakened competition and the deals currently on offer provide rather limited advantage compared to 4 years ago.
  • Mailman's Avatar
    Level 58
    price drops this year had been thought likely - but nothing is assured - and world events are not at all predictable so the forecast prices were a guide for people to consider.

    Indeed they were if you knew where to look although the overall price reductions in energy are lower than some analysts forecast. The 'advice' given on ML's TV prog mirrored the Cornwall numbers.

    For example consider what the Cornwall Insight team put out back in November 2023, where they forecast a general reduction in overall prices in 2024 although it now looks as though this was too pessimistic when you look at the February 2024 forecast .

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    The latest forecast from them is more optimistic (plus we know what the April cap numbers are)

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    Obviously if you fixed thinking that the November figures would up being correct a fix taken out then would cost more than an equivalent fix taken out now.

    I'm not even sure than the energy suppliers (inc Eon Next) are any better at knowing any better than independent industry analysts are such as Cornwall Insights (and you can see how wrong (in the right way) they have been. Also the suppliers are possibly clueless when it comes to the standing charges until they are announced.

    The way the energy markets work means that customers will always be making a decision on tariff-choice based on incomplete information. That being said, could Eon Next make the process any better? Not sure whether they could or even if I want them to do it as some of the numbers being shown in my forthcoming tariff renewal on 31st March do have caveats (such as for Next Flex -'Our flexible tariff, where prices can go up or down with the wholesale market. The prices that you're being quoted on are effective from 1 April 2024.) This is very clear cut for me. Should I personally choose a fixed tariff, I would choose it with my eyes open to the real possibility that over 12/24 months it might cost more than Next Flex/Next Pledge. Perhaps this is one caveat that Eon Next might put in as a 'disclaimer' in the T&C for all fixed products. Fixed price products do have price certainty with them and cannot be quantified - something which is often forgotten.
    Last edited by Mailman; 14-03-24 at 11:54.
  • meldrewreborn's Avatar
    Level 91
    @Mailman

    The energy suppliers are able to hedge for future prices and so have a large degree of confidence. Since fixed tariffs are only a small proportion of the market (less than 15% i seem to recall) there is little danger of them not being able to deliver on their promises.