I'm on a fixed plan - Will the price cap increase affect my direct debit amount?

Following the announcement by the PM today, the price guarantee limit of £2,500 will apply through to late 2024 when a general election must be held by.

This still represents an increase of circa 30% on the April 2022 price cap.  While this is an improvement of the Oct 2022 price cap announcement by OFGEM it will still represents a huge challenge for many households this winter.  we’ve been shielded from the full extent of these rising prices by a very fine and warm summer when we use little fuel for heating, but prices this winter will be approximately double those of last winter. Details on the exact increase to apply to bills will have to be worked out quickly as the new price cap, although now superseded, was due to commence from 1 October 2022.

There was no mention of customers who had signed up to fixed price deals that will now face higher contracted payments than the guarantee.  Perhaps the guarantee will apply to them too - who knows as the detail was missing.  Martin Lewis is already campaigning on the issue.

Recent demands for customers to pay higher direct debits will probably need to be scaled back as the new prices under the “Price Guarantee” will be lower than under the Oct 2022 price cap.

@Blastoise186 Like you my current 2 year fixed tariff would have been substantially lower than the October Ofgem cap and will be lower than the Liz Truss cap though I have marginally over paid since April for that privilege!  Since we will ALL be paying into the foreseeable future (i.e. 10-15 years) for what is being made available now, I think I would welcome the reduction as a down payment.

True. When I think about it, since I’m planning to start scuba diving soon, a bit of extra spare cash would be nice.

I think even fixed rate tariff rates can be dropped under certain circumstances. VAT seems like a pretty obvious one!

Scuba diving will make a nice change from all this plate spinning!

Hi, I have signed up for a 2 year fixed tariff commencing on 11/9. Should I cancel or will OVO have alternative rates on their site prior to Sunday, as it is fairly short notice?

Hey @Curious James ,

I’d wait for now because OVO is likely to post an update soon. In the meantime, it’s probably best to keep that fixed deal.

Yes! Especially for someone with Autism like myself. :)

Thank you Blastoise186👍

OVO has already reacted positively: https://www.ovoenergy.com/

That’s definitely proof they’re working on it! We’ll find out the information as soon as it gets released publicly and might even do our own forum guides.

I’ve done loads of them however, so I think I’ll let someone else grab a chance at this one. :)

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.