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Chose a fixed tariff but government price freeze will make variable plan cheaper - exit fees for cancelling or fixed plans covered in freeze of prices?

  • 5 September 2022
  • 25 replies
  • 186 views

I have signed up for the 2 Year Fix And Protect plan will start on 6th October 2022.

due to the governments recent announcements I now feel I may have made the wrong decision.

 

what are my options?

 

thanks

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Best answer by Emmanuelle_OVO 22 September 2022, 16:36

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25 replies

Userlevel 7
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Welcome @youngwillnick ,

I’m Blastoise186 and I’m one of the resident forum volunteers who helps out here.

Just need to give you a quick heads up. Unlike the Support Team, I don’t work for OVO myself and everything I post is in a personal capacity.

To be completely honest, I’d recommend keeping that fix deal. It might seem counterintuitive but when the next but one price cap comes into effect in January, you’ll be glad you kept the deal because it’s definitely looking like it’s going to be more than 80% more expensive than anything on the market right now. Any losses you make in the short term will be recouped rapidly come the new year.

Thank you

Userlevel 3

I was wondering the same, if the prices are capped at current pricing I feel a bit miffed like I'm being punished for trying to be financially responsible, should of just carried on ignoring all the warning signs knowing we will be bailed out.

I'm sure mine has a £30 exit fee per fuel, if it does get fixed at the current price cap it's probably worth paying it, however I can't see how freezing prices would be anything other than a short term bandaid to a far bigger issue. To me business pricing is the real issue. It makes even fixed domestic tariffs look cheap, high business bills will directly effect jobs 

Assuming the best thing is to wait till the end of the week to see what is announced and make our decisions then. 

They are now saying the government will step in and offer loans to energy companies so prices are not raised , this is great news for customers but what about the ones who  planned ahead the ones that took you up on the offers to fix prices at a higher rate earlier in the year when the news of higher prices first broke .

Now that these prices rises may not happen these customers who did the right thing as advised by OVO , Martin Lewis etc at the time have now been over paying for Gas and electric and are now stuck on prices higher than they are at the moment.

 

will you allow these guys to go back on standard with no exit fees or even bill them as standard as if they never chose the tariff in the first place as it was suggested by you and financially disadvantaged me over the last 6 months and now going forward 

 

i know this news is only new yet it feels like a smack in the face for the people who planned and have been overpaying since January and are already feeling the pinch due to my deal being nearly 3 times more expensive than i was paying on standard  tariff at the time/

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There are too many variables and uncertainties to answer this right now. But the issue is certainly there and government will need to recognise it.

Userlevel 6
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Obv I’ve no crystal ball, but I’d be very surprised if our new leader will be able to afford to keep prices at today’s rates, or even October-December’s rates. And we’ll be paying them back for the next twenty years ! Thanks.

Userlevel 1

OK… so I recently fixed again as my old fixed tariff was ending this month.

But now there is talk of the govt capping energy costs at £2,500.

So my question is how will this work? Will I be able to have my costs capped at this, or will Ovo hold me to the recent fixed tariff, which would have been based on the energy price cap announced recently.

I understand that fixing is a bit of a gamble, but I would hope that given the exceptional circumstances we all find ourselves in, Ovo would work to ease this pain on customers if possible and would not hold customers to tariffs based on what will now be false assumptions.

Userlevel 7
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To be honest… Right now the answer is no-one knows. I’d say it’d be best to keep the fixed deal for now as you won’t be able to get it back and only make a decision once the full facts become publicly released.

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It’s as clear as mud. At least you are probably still within the cooling off period if you wish to cancel. The government announcement is expected on Thursday but issues like those on fixed tariffs will not emerge for some days. If the package is similar to the. Current one then there is no problem.

I’m totally with you.  I thought I was being prudent and proactive by entering a fixed deal. A deal I hasten to add which will be more expensive than the expected price freeze. I feel energy companies should be obliged to allow customers to exit these deals without any penalty to allow them to take advantage of the new frozen prices. 

Has anyone else entered a fixed deal recently? If so and given the expected announcement by the government to freeze prices, are you able to exit the deal without incurring a penalty? 

Userlevel 7
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Hi @Phideaux ,

I am on a fix deal with OVO and the exit fee is the standard £30 per fuel, but if cancelled within 14 days of the start date it’s £0 per fuel.

However, my current deal is so far below the price cap, there really is no point me cancelling it.

That’s how things normally work anyway.

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EDF charge a penalty, Eon Next don’t.  Whether Suppliers will charge this time is debateable given the amount of flak they’ll get if they attempt to charge - expect some government arm twisting to go on.

Hello, I changed to another fixed deal (Better Energy) on 13th June for 1 year when there was a brief window to get a new fixed deal for existing OVO customers.

What will happen following the Prime Minister’s announcement today that household energy bills will be capped at £2500?

Will OVO discount current fixed deals, including those that customers may already be on, or will they allow customers to transfer to the cheaper variable deal without a penalty?

Please can anyone advise? Many thanks.

Userlevel 7
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Hi @jaynebeaumont ,

The current answer is that we don’t know yet. As forum volunteers, we don’t have any information to offer right now so the best advice I can offer is to keep the fix deal as-is for now and decide later, once OVO has official answers ready. :)

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Martin Lewis says the relevant government minister told him those on fixed deals can switch to the Price Guarantee rates (but probably only from 1 October) without paying an exit charge. He then goes on to say an alternative might be 30% off the fixed price tariff - the same sort of percentage off that those on variable tariffs will get.

I'm afraid I don't have the ear of a government minister at the moment, (though I've met a few in my time or is that in my dreams) so I'll defer to Lord Lewis of MSE on this one. But no benefit in making a knee jerk reaction on this one.

Userlevel 3

I hope so!

 

Would be nice to feel loyalty rewarded.

 

Userlevel 1

I called today and cancelled it. It must be past the cooling off period as it was actually about five weeks ago.

Think there should be a £30 per fuel exit fee, but there was no mention of it on the call. I guess even if there is, it’s still worth it. 

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Loyalty is dead.

Userlevel 6
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@jaynebeaumont @stead We know now !! this is from the government’s web page

If you’re on a fixed tariff

If you’re on a fixed tariff, the Energy Price Guarantee will protect you in the same way that it protects standard variable tariff (SVT) customers.

Energy suppliers will adjust fixed tariffs automatically. Customers on fixed tariffs do not need to take any action to get the benefits of this scheme.

https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022

Userlevel 7
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So that could also potentially mean anyone like me on already super-cheap fixed rate deals way below the Energy Price Guarantee could see further price drops? But PLEASE DON’T COUNT ON THIS!!! I cannot confirm whether that will really happen yet.

This also looks like good news for suppliers too - because they’ll ***actually*** be able to have a shot at making a potential profit now.

Userlevel 6
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I’m sure they won’t go lower than the Gov rate !!

Userlevel 7
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Well, if the Green Levy is being ripped off of everyone’s bills, there’s a chance that might apply to me as well. I’m not too concerned either way, since I already know I’m on a brilliant deal

Userlevel 6
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Have a look at this gov link! 

https://www.gov.uk/government/publications/energy-bills-support/energy-bills-support-factsheet-8-september-2022

 

Userlevel 3

Hey @youngwillnick,

 

Welcome to the OVO Online Community. 

 

For all the up to date advice, see this page dedicated to the Energy Price Guarantee. We’ll keep that page updated with any changes as and when.

 

If you pay by Direct Debit, we’d recommend you leave this unchanged until any price changes have been made in October. That way you know you’re paying the right amount. 

 

If you don’t have a smart meter that sends us your readings remotely every day, we’d recommend you submit a manual meter reading this week or next via your online account.  

 

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