Energy Price Cap Rise: what to do… and why we pay more than the rest of Europe

24:33Hence why the fact that the cheapest fixes on the market that are 6 % lower than the current price cap look a very good deal if those predictions are right. So let's just talk that through for a second. If you fixed right now on a 6 % price cap, you've got a 6 % saving. When we get into April, the savings are around 11%, 12 % because the price cap goes up. After that, we're in uncertain territory. But after that, if those predictions were right, you would still be saving substantially by fixing right now. So the risk averse thing to do right now is to fix, but make sure you haven't got early exit penalties so you could get out of that fix if you needed.

25:08Well, I won't disagree with that because I still have absolutely no idea where it's actually going. I think that the real problem is the way the price cap is set. And it's set by adding up the costs of running the grid and upgrading the grid and a small element of VAT and the green levies. But then half the price cap is set by reference to European wholesale gas prices. It's half of where you get to with the cap on each revision every few months, as you say. I think it's time, Ofgem, who I think are one of the most underperforming regulators in the business, should actually relate it to the actual shares of production of different sources of power.

25:56Gas is about 40 % of what we use. but when you have this sort of system there's a windfall gain for people producing wind power and old nuclear power and so on their prices haven't changed but they get the benefit if the price cap allows an increased charge to consumers i think if we change that you would have a better system now i did actually ask the boss of off jim on my telly show about that the other day and they say they said they are looking at changing the way the structure of cost come in the country. I agree. I agree. And I have my similar complaints. He's paid about five times what the Prime Minister's paid.

26:34My biggest issue, I have exactly the same on consumer elements in that the decisions that are made tend to suit the market two or three years ago. You know, I've got to put my head in my hands that they still have this ban on acquisition tariffs, which would kickstart competition. Normally, I would be in favour of a ban on acquisition tariffs in normal times. These aren't normal times. We need a nimble regulator. I agree with you can i just ask one thing and i would say one more thing that they're about they will soon start putting the charge of new nuclear uh on the construction of size well onto people's bills unless some policies change now can i can i just ask that's quite that should go on general taxation if it's going to go anywhere can you just explain on the wholesale rate sure when we talk about people are you see on social media people always show you a graph of the spot rate but we don't have storage in this country and the regulator wants companies to buy ahead for energy security, doesn't it?

27:28So the specific wholesale rates we're talking are not the spot rate. What rate are they? Could you explain that to people, please? There's a wholesale market in Europe which is based on the Dutch prices and it varies, but it's not the day-to-day spot rate. But it is regarded by the regulator as the marginal cost of supply to the UK market. I think that that ignores the fact that most of the supply in the UK is not natural gas. It's other sources who don't have the sort of volatility that European gas prices always have. So I think they should rebalance the basket they use. And that would give more certainty to consumers.

28:06They wouldn't have to go through these complex calculations that you've been talking about. They would know what their prices and their bills are going to be. I mean, the question you wanted to get to was regarding... So look, when I was doing my show, the other day with Offgem on, I think I had 6 ,000 questions and probably 700 of them. Right, 700 of them. If I could summarise, and please nobody take this, I am summarising what came to me is, are all our high costs due to the net zero scam? That was the phrase that kept coming up. Clearly there'd been some campaign to get it through. So from your experience, is our move towards green energy purely in cost terms, is it costing us more or less?

28:50And how will it cost? Will it cost us more or less in future? It's certainly not the only reason for the prices being where they are. The main reason over the last few years has been the war in Ukraine, the loss of Russian supplies because of sanctions, and the higher cost of importing gas into Europe, which drives our prices as we were saying before the break i think on green you have to be very careful i think the levy is there people have generally accepted it my feeling that's the extra amount that's put on all our bills to help the green infrastructure that's right and i think people understand that but now we're going that has hardly begun i mean now we need a new grid to cope with all the renewables and to distribute to cope with distributed sources of production and we need things like new nuclear which are very expensive if that's put on the green levy which is i believe the current plan the spills are going to look uh higher than they are now and that is going to wipe out any gain from a ceasefire in ukraine and the return of russian gas supplies so it's a big challenge for the government.

30:03Those costs have got to be paid for somewhere. I think some of the costs are justified. Some of them like big new nuclear at Sizewell. I think that's a white elephant. And if we go for it, consumers will be paying for it for years to come. But on the green, just to push in. So what I'm hearing is short-term pain. Do we then continue? Can I continue the phrase and say long-term gain once we build that infrastructure? Would it then, you know, in 20 years time, will everyone be going, I'm so glad we did all that. It's made everything better. And we've shifted the way that this works. I'm not convinced of that.

30:40I think the capital cost of doing all these things is going to last for quite a long time. I don't think we'll do it as quickly as people hope. So I think we're going to have the energy transition is a fundamental change in the way we produce and use energy. Somebody's got to pay for it. Somebody's got to pay for all these heat pumps in people's houses. Somebody's got to pay for scrapping their old cars in favour of electric vehicles. Somebody's got to pay for electrifying the railways and so on. This will take several decades, so it'll be a long time until people are celebrating seriously lower prices.

31:15Now, one proposal to help on this. Greg Jackson, the boss of Octopus Energy, says that we should change the way we price for energy so that it's much more regional. So if you're in Scotland and the wind's blowing and you've got all the wind farms there, it should be cheaper for you. I put this to Jonathan Brearley the other day. He said that they are somewhat supportive of that and they hope to be able to move towards that system in the future. Are you supportive to changing to a much more regional pricing structure so the price of pay will depend on where you live and depend on where the energy is generated?

31:41Or you've got a pylon in your back garden. Well, yeah, that's sort of the cost of it. I think it's going to be extraordinarily difficult to have regional pricing and to decide where the boundaries are And if you make it a substantial gap, do people then move? Do businesses then move to capture the low prices? What are the knock-on effects of all that? I think we should probably generally have a much more stable and unified system across the country rather than going into that complexity. Nick, I think that's absolutely brilliant. I mean, clearly, just for the sake of balance, these are all opinions about the future and there are differing opinions from people with expertise just like yours on the top of it.

32:25But thank you for just giving a picture of the complexity that's out there in the pricing of energy right now. I mean, clearly, what most people want is they want the energy to come into their homes, work well and not pay too much for it. And we're not there yet. It's more of the questions on the price. Let's go back to the practicals. Yes, it's more like a statement. Claire's frustrated, could save a parent£600 a year on their energy, but can't get them basically to go on to monthly direct debits. So what? They're paying on receipt of bill. They're paying on receipt of bill. Yeah, and they just stop with that and just have got a theological blockage on going to direct debits.

33:02I mean, that is absolutely the most expensive way. So, OK, set record now, and this is the bit to play them. To Claire's parents, you are on the most expensive way to pay for energy. Payment in receipt of bills is 6 % more expensive than paying by direct debit. And that's just on the price cap. The cheapest way to pay for your energy is by getting yourself a cheap fix or specialist deal. And for that, you also need to be on direct debit generally. my suggestion if you are ideologically opposed to monthly direct debit where it's spread is to look for variable direct debit as we discussed earlier in the program that's where it works very much like payment in receipt of bills and payment in receipt of bills is of course where you get a bill and then you pay it each month variable direct debit is where you get a bill and the money is automatically taken each month based on what you used in that month it's not spread across the year so it's the halfway house, if you like, between monthly direct debit and payment in receipt of bills.

34:03And you can move across that way. But you are on payment in receipt of bills. You have to be aware of how much more money you are spending just to be able to do it. And it's worth just be noting a couple of other things. I've talked about fixing as being the prime route at the moment, with fixes being 6 % under the current price cap. And so at least until July, you would be making a substantial saving and the predictions are after July you would be. There are other options out there too. EDF and British Gas for very low users have tariffs which are essentially price cap trackers where you get£50 off the standing charge.

34:38They're the same as the price cap with £50 off the standing charge. For very low users, well under£100 a month, they can be beneficial because the standing charge is making up a bigger proportion of your bill. There are, and we've talked about them on the podcast many times before. The Octopus Tracker, the Octopus Agile, the Tomato Tariff. Octopus and tomato sounds like a bad salad, doesn't it? We talked about those, and they are, for sophisticated users, well worth it. The other thing is really worth mentioning, and an interesting tariff at the moment is for those people who have electric vehicles.

35:08There are two types of electric vehicle tariffs. There is the add-on tariffs, which tend to be offered by Scottish Power and OVO, which is where basically you can get any of their normal tariffs, and then you get an add-on where you get super cheap rates only for charging your electric vehicle. And then you have two-tier tariffs, which are offered by most of the other providers, which is effectively where you pay your normal rate during the day, but then you get a super cheap rate overnight, which you can get not just for your electric vehicle, but anything you use. Generally, the two-tier rates are good for those people who've got a big electric car that they're charging a lot and can shift other usage overnight.

35:43The add-on tariff are for those who just have an electric car. And what I wanted to note is OVO has a relatively cheap fix at the moment. And with OVO, it has an add-on. So you could get a cheap fix at OVO and do the electric vehicle add-on on top, which is worth looking at. You need to do your numbers. Two quick ones. Donald says, I can't get an O2 signal where I live, so I can't use a smart meter, so I can't take advantage of cheap early hours of the morning electricity. So, the fact you can't get a smart meter, if it is not practicable to have a smart meter fitted, i.e. you've tried and they say you can't have one, you should be able to access all the tariffs that are available that are smart metered only, such as fixes.

36:27However, without a smart meter, time of use tariffs are particularly difficult because they can't measure when you're using what. So you are opted out of that. You may be able to get, I don't know, I'd have to check whether you could get an old school economy seven type meter, but it's not a particularly competitive way to do it. So I'm afraid, I mean, listen, And there are massive problems with smart meter rollout. We've discussed before, I've written to Ed Miliband, and I've had some warm feedback back on this, that currently the targets are all about installation. So firms get fined if they don't install enough new meters, but there's 20 % of existing smart meters don't work.

37:00And I want the targets to be changed on working smart meters so that they have an incentive, not just to put a meter in your home, but to actually make sure it works as well. And until we get that, we're going to have hideous problems on this massive cost that we put into trying to get smart meters rolled out there, even though they're not working for lots of people. So I have a lot of sympathy, but I don't have a fix, I'm afraid. But we've got more of your questions to answer on energy in the podcast extras coming later, including what's the best tariff if you've got solar panels? When are they going to be bringing in the new no standing charge price cap option?

37:34And is it worth going for half price energy at the weekend? All of that to come. So don't turn it off yet. let's get on to tell us what is the most shocking horrifying unexpected bill you've ever received and how did you pay or resolve it we've been sent this tell us sort of fits the general subject of today with the price cap going up doesn't it we sent this on on voice note hi martin ben here my unexpected bill was when i racked up 35 000 pounds worth of charges after a five-day trip to Malta and despite having EU roaming included in my contract I came home to find my mobile phone completely cut off.

38:12When I opened the EE app I saw the horrifying amount outstanding. I rang them and it turned out that all of my data when I'd been in Malta had been charged at the maritime rate hence the astronomical costs. This was quickly refunded and my phone service was reinstated but seeing that amount on the app was quite a shock. Wow, that's fascinating. And I've heard similar before for people who've been in the EU but near a border to a non-EU country and then they don't realise that they're on the signal for the non-EU country and it works that way. But the maritime rate, I mean, that's a sky-high astronomical rate.

38:49Well done for getting it sorted. I mean, this one isn't as nice. Kelly, as a new driver over 25 years ago, I crashed into a lamppost in the snow. I was honest and reported it and then received a bill for over£500 from the Kamak Council. Huge amount all those years ago too. I still drive past now and say hello to my own lamppost. I inherited my flat, which is leasehold, so somebody called Bolky. The Housing Association did work that needed doing and I got a bill for£10 ,500 payable over 12 months. Checked my lease, yes, I'm liable. talked them into 18 months and took out cash transfer and 0 % credit cards.

39:29It's not fun, is it, this stuff? But you know what else isn't fun, Adrian? Go on. Play the theme tune.

39:42Hello, welcome to Martin's Money Mastermind. I say not fun, it's a lot of fun for me. It's just not fun for Adrian. But hey, I think that's a sacrifice it's worth your paying, mate. Now, the current score, Adrian, has got seven right and ten wrong, which isn't bad. It's slightly better than random chance. You're doing all right. The question this week. Now, listeners, please do congratulate our Adrian. He has won a very prestigious internal BBC prize drawn by random lots. BBC Technology has managed to create the world's first time machine. and Adrian has been forcibly volunteered as the first person to use it.

40:22He's decided to revert back to when he was 21 and just starting out his career, no doubt assuming he could probably do it better the second time around. So please, I want you now to close your eyes, unless you're driving, I want you now to close your eyes and picture a young, handsome, strapping, charming, whip-smart, keen young man with a West Midlands accent. That won't be me. And then picture a 21-year-old Adrian Charles sitting at the desk next to him. Sorry. You've ruined it. Sorry. You've ruined it. Sorry. I'm re-recording that for the podcast. Okay. Simon, take a note. My question. Yeah.

41:00Does our 21-year-old Adrian in the current day, starting full-time work, earning exactly£19 ,999 a year, automatically get opted into a workplace pension, including the employer's contribution? That's your question. So it's a 21-year-old,£19 ,999 a year. Do they automatically get opted in to a workplace pension with a contribution from the firm as well? A, yes, indeedy. B, no, it's too young. C, no, it's not enough earnings. We're talking about the here and now. We're talking about the here and now. We're talking about the current law, not when you were actually 21, though, because the time machine has the wonderful factor to be able to do that.

41:42Are you automatically opted in? A, yes, indeedy. B, no, it's too young. C, no, it's not enough earnings.

41:57I think, no, it's not enough. What are you thinking? I'm thinking about this. You earn£19 ,999. I'm thinking about how your mind works. If it was yes, indeedy, there'd be no point asking the question. So, because the point you're making is that you have to opt in or something, aren't you, too? Oh, I don't know. I think... Actually, I'm going to say yes, indeed, because I think... I'm just going to take the view you should be doing what's right, and what's right is what should happen, and you should... If you're in a full-time job... You should have got a full-time job. You should be opted in. I'll stop that.

42:36Yeah, you should be opted in. OK, so let's go through it. Absolutely in the UK, the vast majority of employees when you start work are opted into a pension. And if you're opted in, then the contribution is 8%. And that means you put in 5 % and your employer has to add in 3%. It's effectively a pay rise. It's one you should not be opting out of. But there are rules as to exactly who this applies to. Anybody earning over £10 ,000, so it's£10 ,001 plus, will be opted in. And how much were you earning in this case? £19 ,199. So I might be right. I might be right. However. Except. Except. That is only for people age 22 to 66.

43:21The law is an ass. The world's an ass. I'm opting out. I'm opting out of life. Never mind. So I'm afraid we can instantly do the... You got it wrong. Well, I got it right. Just the world's an ass. You should have got it right. But the reason for doing this question, you're right, there is always a reason for doing the question. It's not just to make fun of you. Right. There are three categories of people. People who can't join the employment pension scheme, people who are automatically opted in, and people who aren't automatically opted in but can choose to opt in. And if you do choose to opt in, your employer must match contributions.

43:53And that's the bit I want to focus on. So anyone aged 22 to 66 will automatically be enrolled into their workplace pension scheme and get the matching contributions. But if you are aged 16 to 21 or 67 to 74, you earn over£6 ,241 a year. You have a right to ask to be opted in. So a 21-year-old Adrian, who at that point would have no children, probably might even be living with parents and have no costs, Earning 20 grand a year absolutely should be asking to opt in and then his employer has to give him extra money to go in his pension. And the fact that you're doing it at age 21 means it has a long time in order to be able to compound and to grow.

44:35Equally, and a more difficult scenario, if you earn£6 ,241 a year to£10 ,000 a year, then you're in your age 22 to 66. Then again, you can ask to be opted in, although the contributions would be relatively small and it may be more difficult in those circumstances. But it is really worth, especially younger people or people older who are still working, who've got the money, getting those matching contributions and asking to opt in. Now, if you had listened to the pod only episode we did two weeks ago, this was all in there and you would have known the answer at the time. I'm going to give one final warning just on this.

45:09It's really important. Remember you're opted in. Generally, I'd suggest you don't opt out. But I've got an even, because, you know, this is the best thing you're ever going to do for money saving in the long term. But what people often ask me is, it's a little expensive putting the 5 % in. Can I drop down to say only putting 4 % or 3 % of my salary in? I just want to clarify the law for you. Firms, once you're opted in, which is automatic usually, the contribution is, the minimum contribution is 8%. So if you put in 5%, they have to put in 3 % minimum. If you decide to put in 4.9%, you're no longer in that system.

45:47They are no longer mandated to contribute. So dropping down 1 % if you're on the minimum could mean you get nothing from your employer. Now, some firms will still give you if you drop down it because it's a minimum. They can do what they like as long as they're doing the minimum criteria. But I would strongly caution you if you're going to drop down a percentage or two to check what the rules are and check that that doesn't mean you are throwing away your employer's contribution if you're dropping down 1 % because you're going by the minimum and they no longer need to contribute. And just to say on this, we did the Pension Pod Only show two weeks ago.

46:25It's been absolutely massive. It's been right up in the podcast charts for the last couple of weeks. If you're an employee or you're not an employee and you want to know about your pension, it's an absolutely crucial thing to understand. So if I can just plug that people go and they download that podcast and have a listen, that would be great.

46:43now i've got good old pps podcast producer simon with me now and we're going to try and get through a few more of your energy questions we had so many of them i just want to try and do as many as we possibly can what have you got yeah we've got this one from chris when can we expect the zero slash low standing charge tariffs to be introduced okay so the consultation came out about a week ago this is the idea that there will be two price caps you will keep the current price cap as it is, and then firms will have to offer another one, which is probably a no or very low standing charge price cap option.

47:19Now, what they will do is while the standing charge will be lower, the cost for each unit of gas and electricity will be higher. This will be on the price cap. So there'll be two price caps and you'll be able to choose which one you want. Now, this came about being really blunt because it's my suggestion. I've always been campaigning for them to get rid of the standing charge. I think it's a moral hazard. It disincentivises lower users from cutting their bills. It leaves many elderly people who only have their gas on in the winter still having to pay every day for gas in the summer even though they're not using it.

47:50The reason they're not getting rid of it in its totality is because there are costs associated to it that have to be paid for somewhere. And if you get rid of it, you put up the unit cost. And many of the charities who represent vulnerable high users, you know, you may have a disabled child on a ventilator which is costing huge amounts of electricity each year, were worried about what happens there. Clearly what should happen is the government should look after the people in that situation specifically and then bring the standing charge for everyone, but that would involve the government and Ofgen working in concert, and that isn't happening.

48:20So I came up with this compromising idea that you have a dual price cap. We got the final consultation out on that about a week ago. I believe the idea is for it hopefully to be in place this winter, but I think that's relatively optimistic, maybe by next spring. and that means for those on the price cap you would have a choice you stick on the normal price cap or you move to the no standing charge price cap now when i read the consultation the biggest problem with the way the new system is proposed to be set up which i will of course be feeding back on and i've already discussed it with them is this is the price cap this is the backstop option for those people who don't do anything and the real concern is many vulnerable people, especially elderly users, who are some of the most information disenfranchised, including someone, say, with onset dementia.

49:06Well, if we're asking them to pick which of a complicated tariff they're on, well, that's the reason they're on the price gap in the first place, because they don't pick. So, I mean, you know, in a perfect world, I'd say people should automatically, everyone should automatically be defaulted onto whichever one is cheapest for them. But I'm not going to get away with that. And when you're campaigning, you have to manage what's a legitimate expectation and what you're just not going to win and focus your energy on what's winnable. So my focus is looking at a cohort of vulnerable users and working at the moment with my team on exactly how we define what a vulnerable user would be.

49:36And for those vulnerable users, we want to mandate the energy firms to do a calculation based on their previous year's usage to work out which they would be cheapest on, and then to automatically default switch them with an opt-out, so you'd notify people, but say you can opt out of it. Default switch them to the new no or low standing charge if that would have been materially cheaper for them. Now, I think that's the right way to go forward. I've also talked about how it should be communicated. I don't think it should be from the firm because people don't trust the firm. It should be on a sort of Ofgem letter sent through by the firm with Ofgem's heading on it to explain what's happening.

50:17But I think we need that form of defaulting for the people who would not choose it anyway, for whom it would be best for if they're vulnerable. But you asked me when it's going to happen. Well, it would be nice if it were in by this winter. I think maybe next spring at best. We're at final consultation stages. I'm sure some energy firms are going to object to it. So we just have to wait and see. But cross your fingers. This is more of a statement than a question from Claire. Please stop making Camega Smart Meter part of the cheaper deals. Not everyone wants one. Well, look, I mentioned this in the show.

50:46It is not a universal fact. I think one of the reasons for the confusion is because Because firms are incentivised to get you to install a smart meter because they're fined if they don't, they often talk about it in a way that makes you think you have to have a smart meter. Now, let's just be absolutely plain. They cannot force you to have a smart meter. They're not allowed to do that. Now, I've seen many letters sent by firms that tell people, it almost looks like they're telling you you have to have a smart meter. But if you read it the right way, you can see there's nuance in there. You do not have to have a smart meter.

51:20There are a couple of exceptions to that. if you have an old school meter that has gone past its use by date and they do have use by dates the only meters they fit these days are smart meters so you would have to have a smart meter fitted but you do have a legal right to get it to be the smart element of the smart meter to be turned off so it just looks like an old dumb meter if you know what I mean so it works like an old dumb meter now listen I have to say I'm generally in favor of people having smart meters I think they make life easier you don't have to do the meter readings and you can see what you're using yourself, but many people don't like them.

51:51But when people ask me about fixing, what I suspect is happening, I said this in the main show with Adrian, but I'll repeat it. I suspect people are calling up their existing company and saying they want to fix and they're saying you have to have a smart meter because there are quite a few fixes that require you to have a smart meter. But if I just look, I've got a list in front of me of the five cheapest fixes on the market right now based on average. I'm not going to tell you what you are because you need to go into a comparison site and do a whole of market comparison to find your cheapest fix because it depends on how much you use and where you live, which is your cheapest fix.

52:23Number one, smart meter's not required. Number two, smart meter's not required. Number three, smart meter's not required. Number four, smart meter's not required. Number five, smart meter's not required. The idea that you must have a smart meter to fix is not correct. It is simply not correct. The cheapest tariffs on the market will allow you to switch without a smart meter at the moment. It's probably because they've hit their targets for this year on smart meter installs, so they're allowing it. And it does tend to be time of year dependent to an extent as to whether you need a smart meter or you don't.

52:56But right now, you can switch to a cheap fix without a smart meter. Louise wants to know, what if your current supplier is doing half price electric at the weekend? How do we work out if it's still cheaper to switch last fix? Look, in general, it's daytimes at the weekend. People's usage isn't that much. Even if we just say that you had standard usage at the time and that you were in, what are you talking? You're talking 1 14th of the weekly usage. So it's a 1 14th of the weekly usage at half price. So it's a 1 28th off. And when you start taking 1 28th off, which is 3 or 4%, with the price cap going up 6.4%, I mean, doing back of the envelope numbers as I talk live, I hope I haven't got them any wrong at all.

53:34I mean, that's nothing compared to the cheapest fixes that are 6 % less than the price cap already and will be 10 % or 11 % less than the price cap when it comes in April. So unless you happen to be able to save all your energy usage for that Sunday or whenever it is, whenever your particular firm is offering you, and you can put everything on so a huge chunk of your energy usage is being done on that Sunday, generally, it isn't that big a factor. Impressive to do 28 times tables off the top of your head. Well, something like that, yeah. In fact, it's even less than that because it's not a half a day.

54:08It's generally about a third of the day, the actual hours they give you. So we probably make it even smaller than all that. Carry on, carry on. David wants to know, what about those who fixed previously? Should we look to swap to something now before the fix runs out later in the year and the price has gone up again? I think I'm fixed till around October. As we discussed in the programme, if you're on a cheap fix until October, it's probably cheaper than you can fix at right now. I would personally, and remember, I don't have a crystal ball. I don't know what's going to happen to energy prices.

54:34I would stick on your cheap fix now rather than having to pay a penalty to pay more by moving to another fix. There is absolutely no reason to assume that fixes will be a lot more expensive in October than they are right now. They could be more expensive in October. They could also be cheaper. And all you're talking about, you're talking about, you'll move on to the price cap. You can always fix again in October. Clearly, though, there could be massive issues that change that. And there's some crystal ball gazing. But if you ask me what I would personally do, So I would stick on the cheapest deal that I can possibly get, which is probably the fix you're on.

55:05If you got a cheap fix six, seven months ago, they were cheaper than the cheapest fixes you can get right now. In fact, just two weeks ago, I was telling people I think fixes are going to get more expensive fix now. And they're more expensive than they were two weeks ago. So almost, you know, and that's more expensive than when I was telling you to fix two months ago. So this has been a constant battle for me saying, get off the pants cap. But that doesn't mean get off your fix. It means get off the price cap. Garnet's been in touch. We have solar panels and battery. and our honest octopus flux rate where we get money back for exporting energy useful in the summer, not so much in the winter, would you suggest fixing or sticking with what we've got?

55:40Okay, there is a gap in the market for this information and it's one I'm working on trying to fill but I haven't filled at the moment. So you're going to forgive me for giving you a generic answer rather than the specific answer I hope. When you have solar panels, assuming you don't have the old antiquated feed-in tariff, which is unbeatable, where you get paid a set amount for generating energy, irrelevant of who your supplier is. It moved to a market system four or five years ago. And that means that there's a market for paying you for the energy you're generating and sending back to the grid when you're not using it yourself, the smart export guarantee.

56:18And that's the price you get paid for generating electricity to the grid. Now, when you have solar panels, there's two gains. There's the amount it reduces your electricity bills just because you're not using it because you're generating it yourself. And then there's the excess that you're paying into the grid that you get paid for onto the modern system. Now, on that modern system, the tariffs fall into three broad categories. The best rates that you get paid for generating electricity come from if you did an agreement and got a firm to install your solar panels and give you a guaranteed rate, but then it might not have been the cheapest way to install your solar panels and the capital cost.

56:52So there's a balance to be had there. The next best rate is for firms who say, we will give you a better rate if you use us to supply your electricity. And the final rate are the open market rates that you can get even if you're not using that firm to supply your electricity. And if you are on the last one, then very simply just go for whoever is going to pay you the most. So you could be with podcast producers Simon's electricity firm and you could be with Martin's solar payment firm. They don't have to be the same firm. Now, where it gets more difficult is when we're looking at those last two options, the option of your solar panel tariff is linked to your electricity tariff.

57:36How do you work out what's best for you? And at the moment, it's a case of doing it on a calculator. And it is literally a case of if your solar panels aren't generating much and your electricity is costing you a lot, you'll generally be better off just going to find the cheapest electricity provider and then getting the best open market solar panel rate that you can pay for what you're generating. If your electricity bills aren't that big and you're generating quite a lot of excess solar, then you'd want to go for one where you're getting the very best solar rate interlinked with the best electricity rate.

58:08At the moment, I am not aware of any comparison that will work this out for you. I said it's something I'm working on trying to get done, but I don't have it at the moment. So it is literally, I'm afraid, it's the answer you're going to hate from me. It's getting your calculator out and going through the different rates. There are lists of the different rates and who is offering what. So you'd want to go on to a comparison to find of the ones who are getting you to link your solar, how much you'd pay on your energy there, and then to work out yourself how much you generate on solar energy each year and whether the better generation rate offsets the difference in price on the electricity.

58:44That was a very complicated answer. I hope it makes sense. Unfortunately, there just isn't a simple solution on that for the moment. That's what the podcast extras are for, though, doing a bit more detail. And I hope we've done that. So that is the end of the energy section for today.

58:59and just quickly let's zip through a few more of the tellers remember this week's tellers what's the most shocking horrifying and unexpected bill you've ever received and how did you pay or resolve it i have to say i set this a couple of weeks ago and we didn't get time to go through it i feel slightly bad i'm doing it in the same week as an energy price rise it's all a bit too depressing so we won't do too many of them will we simon i'll start if you like i've got the facebook ones Shelley, one and a half grand for a private root canal and crown, and it was rather bloody painful, all thanks to a soft mint.

59:29Valerie sent us this one, home late one night, find out we'd lost our keys, desperately called a locksmith, got charged£1 ,000 to change the lock. Wow, I don't know what type of lock you had or what type of locksmith. Was it on four o 'clock on New Year's Day morning, or just after the party or something? Tanya, a few years ago, I used my hot tub daily for nearly a week, and my electricity bill skyrocketed by hundreds. The very same week, my daughter's childcare gave me a bill for over 400 quid as they'd been undercharging me in error and I hadn't noticed. I got rid of the hot tub, but the daughter had to stay.

1:00:04And just a quick note while we're on, while we're talking about childcare, there is lots of changes coming to childcare over this year from September in England. All nine months to two years old will be entitled to up to 30 hours of funded childcare joining three and four-year-olds who get it. But just a quick reminder about what's totally misnamed the Tax-Free Child Care Scheme, or as I like to call it, the Working Families Child Care Top-Up. The reason I like to call it the Working Families Child Care Top-Up is because that describes what it is. Whereas calling it Tax-Free Child Care, it is neither tax-free nor about tax.

1:00:37So it's a completely ridiculous name that I'm campaigning to change. But just worth anyone who pays for childcare and isn't on benefits to remember. As long as both of you earn under£100 ,000, then you can save in the tax-free childcare scheme. And then effectively, for every 80p you put in, there's limits, the state will add 20p. So for a pound of childcare, you're only paying 80p. It can be worth hundreds or thousands of pounds a year to some. I'm not going to dot all the I's and cross all the T's. But if you're paying for childcare and you haven't heard of it, go on to gov.uk and look up tax-free childcare.

1:01:11Totally misnamed, though. Totally misnamed. drives me up the wall that why would you name something that just to confuse people, the answer is probably because you want a political game to try and claim it was tax free. Surely it's better communication to call it something like the working family, because you have to be working to get it, working family, childcare, top up, because it tops up your childcare. It doesn't give it you for free. Surely that would be a better name because it actually helped people understand what it is. I will put my soapbox away. I'm in the childcare game, by the way.

1:01:41How old's your little one now? She's 15 months old. So the nine month thing came in at just the right time for us. Yes, 15 hours a week going to 30 hours a week. Yes, correct. But a key thing is you've got to get signed up early with nurseries. And particularly if you're going to find a nursery that takes the hours, you've got to be signing up before the child's born. If you're pregnant now and you're listening to this, congratulations, sign up to a nursery. It's interesting you say that because I was in with the Secretary of State for Education, Bridget Phillipson, for a meeting yesterday. As always, it's a CanPay meeting.

1:02:13So for freedom to speak, I don't talk about the specifics of what was said. But childcare was a big topic of discussion there, as was financial education and as was student finance, lots of suggestions and changes. It was a preliminary meeting. She was listening. It was good. I think there'll be more to come and more to be done on that. But yeah, I mean, the way the childcare system works has to be improved. If you want to improve our economy and get growth, we have to provide people support when they go to work to make sure that their children are looked after. and one of the interesting discussions and this came mainly that way and I thought this was fascinating actually is I think we have to be very careful when we talk about childcare.

1:02:48I mean, my daughter's 12, yours is 15 months old, yeah? Yeah. She is the most precious thing in the world. I mean, forget jewels, my daughter's called Safar so she was a jewel but forget jewels and forget money, there is nothing more precious for most people than their child. So the last thing you want to think about is cheap childcare. The last thing you want to think about is that, oh, we're going to have loads more, far fewer people looking after the saved number of children. Because actually, the one thing that we want is we want to trust the person who we are putting our most precious attack into the hands of, the thing that we care about more than anything else in the world.

1:03:21And I think that they were talking about that, which I was quite impressed with. I think that's a really important part of the discussion. You just want to feel that where you're putting this thing that you love with every bit of your being, it's going to be well looked after and they're going to be happy, don't you? It's not just, even from me, it's not just about the money. Oh, 100%. Yeah. Anyway, let's get back onto bad bill stuff. Well, I'll tell you, I'll do my one on the bad bill. Me and a friend, and this is quite a long time ago, we started renting a flat. And we used to both get paid on the 15th, but our council tax would come out on the 12th.

1:03:54So we used to just pay it on the 15th when we got paid. So we'd always pay it late. And they don't like it when you do that. And we got quite a big bill. Basically, they sent us a court order and were like, you've got to pay your entire year up now. Well, I've talked about that before. The council tax debt collection is the most vicious form of debt collection from most councils. They can do things that no commercial lender would be allowed to do. And they can escalate. You miss a bill, within six weeks, you can go through the process. First of all, they say, we don't want you to miss a month's bill, you now have to pay the whole year.

1:04:25If you then can't pay the whole year, they can go and you can have bailiffs in within six weeks. Now, it would take six months before they even started to escalate it properly on commercial lending. And I've been campaigning. I mean, it's terrible through my money and mental health charity campaigning for the way that council tax debt collection works to be rapidly overhauled because it's not good for their constituents. I mean, it doesn't help people's financial situation. It doesn't help enable people to stay economically solvent. It actually risks catastrophising their finances the way it works.

1:04:53But that's a subject for another day. That's a couple of off topics we've done here. I think it's probably time for us to stop on this, Simon. Perfect.

1:05:03Now, just a little bit in the pod extra. I gave evidence to the Treasury Committee of MPs at the House of Commons this week over lifetime ISIS because they're doing an inquiry. I've often talked about the lifetime ISIS in the podcast. It is a great thing for young people to look at. It's a product where if you save in it, you can put up to£4 ,000 per tax year in and the state adds 25 % on top, provided you use it towards a first time property under£450 ,000 or you keep it until you're age 60 and then you get the bonus as well and you can take the money out. The problem comes if you try and take your money out for any other purpose when effectively you pay a 6.25 % penalty.

1:05:48And that's one of a number of holes in the lifetime ISA I told them about. Let's hear just a bit of it. I have a problem with it for first-time buyers buying a house. So what we have is we have a succession of young people who are saving in the vehicle they have been encouraged to save in by the state, who are then trying to use their savings to buy a first-time property. But due to house price inflation, their property has just tripped above the£450 ,000 level. and then not only do they not get the thousand pounds a year bonus they were intended to get which I understand it's legitimate as a threshold they are fined by the state effectively 6.25 % of their own money in order to withdraw that money to get the cash out and the problem with that is not just for the individuals who it affects when I do television programs on the lifetime ISA I have to warn people about that and when I warn them about that because you have to have the caveat you should only save in this if you are definitely going to buy a property under£450 ,000.

1:06:52Instantly we have a huge dropout in the number of people who get it. So the sentiment that that does is very negative. Generally in every other way the lifetime ISA is potentially superior but not in that way and that needs to change. I later pointed out that for exactly that reason there is also a social inequality in this form of the penalty because the people who tend to be most put off by the concept of the being a fine are those who are most risk averse, who tend to come from the least financially educated backgrounds, which intuitively tends to be those who come from the least educated and the poorest backgrounds.

1:07:26So the fine in itself, while it may not affect them, tends to put off people who are risk averse. That wasn't the only thing I told them. It was a big evidence session. I also talked about the fact that I don't think the lifetime ISA should only be for those who are aged under 40. Why should someone who hasn't been able to buy a house yet for the first time and they've hit the age of 40 because they've been waiting, suddenly be penalised from opening a lifetime ISA. And there was also a big conversation about the fact that it's this rather weird hybrid product where you can save for a first-time property, you can save for retirement.

1:07:56But the problem with the fact that it's saving for retirement is many of the big banks are scared to offer lifetime ISAs because they're worried they will be done for mis-selling if people use it for retirement savings because, you know, an employee saving in a pension because of the employee contribution and the tax breaks is so much better off than using a lifetime ISA, which is why none of the big providers offer them, which has not helped communicate it, and we need to fix that disjoined too. But if you want to, you can go to the Parliament website and listen to the entire evidence session.

1:08:28It was a bit spicy at times too. I'll leave that up to you.

1:08:34OK, you lucky, lucky podcast listeners, it's that time of the show where I give you tips that are just for you. I should cocoa. I know, how exciting. Now, this week, it's all about woo-woo! Yeah, there are a couple of train tips. Unfortunately, it's because of prices rising. Now, the first one's universal. Rail card prices rise this Sunday, the 1st of March. I hope you're not listening after that. I'm sorry if you are. There's not much we can do. A one-year rail card is rising from£30 to£35. A three-year rail card from£70 to£80. But currently, if you go on the MyTrainPal website, and you use the code RAILCARD25, you can get 25 % off the current price before it goes up.

1:09:17So that's a one-year rail card for£22 and a three-year rail card for£55. Well worth bagging if you don't have one. If you're not new to that site, then you get 10 % off, not 25 % off, but that's still 10 % off the current price, not the after-the-rise price as long as you do it in time. Now, this applies to the friends and family card, which is good if you've got kids. The two-together card, if you regularly travel with someone, could be your partner, could be whoever you go to a football match with each Saturday or whenever it's on. Could be it's the network rail card, the senior rail card and the 16 to 30 card worth doing.

1:09:47My second tip also on is for regular rail users in England. Consider buying a season ticket now if a season ticket is going to work for you. I mean, you need to do your maths on that as prices are rising 3.8 % on the 2nd of March and the difference could be hundreds of pounds. So if you're going to buy a season ticket, you're nearly running out of your other one. It's worth checking your price and seeing if you can buy it now before the prices go up. And that is in England. So that's a couple of train tips to try and keep you on track.

1:10:23That's it for this week. If you've enjoyed it, please tell your friends you've been listening to the Martin Lewis podcast. We tend to put out a new episode every Thursday. Do subscribe to keep up to date. Then your pockets will be pleased with you. If you've not enjoyed it, well, you know, I mean, what do you want me to do? Slop my guts out We can reach out Sitting in this dangerous radio studio Seriously The microphone in front of me I never know what's going to happen Sometimes it gets loose at the tilt It's even bashed me on the nose once I do all of that You've listened to the end And you haven't enjoyed it Sometimes I just don't understand you lot Bye

1:11:09I got a mouth. I got a feet. So I'm going to make sure everybody eats. Martin Lewis is the founder of moneysavinexpert.com. But of course, other consumer and price comparison websites are available. You can get in touch with Martin's podcast production team by emailing martinlewispodcast at bbc.co.uk. The offers and rates mentioned in the podcast are correct at the time of recording. However, if you are listening on demand, it's worth double-checking as details can date. Remember to subscribe on BBC Sounds and leave us a review however you listen.