Mouthy Money Your Questions Answered panellist Martyn James assesses the pros and cons of choosing a fixed-rate energy deal or a variable energy tariff.  

Question: I’m worried about the rising cost of gas and electricity. Is now a good time to choose a fixed-rate energy tariff or should I stick with my provider’s standard tariff? 

Answer: Energy prices have soared through the roof in the last year and as Prime Minister, one of Liz Truss’s first measures was to cap the price paid at £2,500 for the next two winters.

But while this sounds like good news, it’s still a lot to pay and significantly higher than even six months ago.

Many people like you are now questioning whether to fix their energy bills or to keep paying their provider’s standard tariff. While it depends a bit on your personal circumstances, my advice is not to fix yet.

This is because while fixing was a great idea in the past, now it’s usually the most expensive option.

To make sense of it we need to look back on the last year.  In April consumers with a variable tariff saw their bills rise by 54% on average to £1,971 a year. They were set to go up again, by 80%, in October before the government announced the latest price cap.   

The price cap, managed by regulator Ofgem, means the amount paid per unit of energy won’t change for those on a standard tariff.

However, even with bills at an average of £2,500, many people will struggle to pay and are trying to work out if they should fix or stick with a variable tariff.

Just a year ago, fixing was a great idea, as it meant you were protected from fluctuations in the price of energy in what has always been a volatile wholesale market.  

But with the energy crisis in full swing, fixing has become exceptionally expensive. Fees for leaving the contract early (exit fees) have hit astronomical rates too, increasing tenfold and costing up to £600.  

When you ‘fix’ your energy bill, you are entering into a contract with the energy provider to pay a set amount each month for the energy you use.  

This isn’t a flat rate – like £150 per month. The fix is based on the unit price for the energy you’ve consumed, though you may get ‘guide prices’ so you have an idea of what people living in a similar property are paying. 

The government has suggested that all consumers should ‘get the benefit of the new £2,500 price cap’, not just those paying their provider’s standard tariff. 

But although people who fixed energy prices at an expensive rate will get a discount, the way this is calculated is enormously complicated and many people may find they will still lose out as a result.

So, if you’re trapped in to an energy deal that’s way more expensive and feel you were pressured in to taking it out, ask the firm to remove the exit fee or make a formal complaint.

For now, my advice is not to fix a deal unless you are absolutely sure it’s good value. We don’t know all the details of the government’s plans yet, or what the future might hold.  

Therefore, it’s worth biding your time, keeping an eye on the news, and using trusted, free guides, like MoneySavingExpert to find out about your rights and the best deals out there.

Martyn James is consumer rights expert, campaigner, presenter and journalist

About our expert: Martyn James is consumer rights expert and campaigner with over two decades of experience covering every business sector in the UK, from finance to utilities. As a broadcaster and presenter, he appears on all the national television channels and is a regular guest and presenter on Rip Off Britain, Morning Live and The One Show, as well as commentating on breaking stories for all the news channels and bulletins. As a journalist, he has written for all the national newspapers and regularly features in the news.

Mouthy Money Your Question Answered compiled by Rebecca Goodman

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Mouthy Money Your Questions Answered panelist Paul Britton answers a reader’s question about how to get a refund for money paid to a wedding caterer who died before the day.

Question: The caterer for our wedding tragically died just before the day, after we had made all the payments of around £3,500. We don’t have much information on the death, and as sensitive as the problem is, what recourse do we have to recover our cash? As far as we are aware they were operating as a sole trader. TM, Carlisle

Answer: You may be able to settle the outstanding money quickly and simply by contacting the caterer’s estate. If this doesn’t happen, however, you may have to claim back the money through legal action. 

The first thing to do is look at your contract, if you had one, to find out what obligation each party has and the best way to settle the contract. Even if it’s not a written contract, but a verbal one, the same rules apply.

It should have details about what happens if the caterer, or the people employing them (you and your partner), die before the work is conducted.  

While this will be unique to the contract you had, the most common terms are an automatic termination on the death of either party, or the right to terminate, where either party may terminate the contract but it needs to be performed until terminated. 

Although they sound similar there are two key differences. The second example requires the surviving party – you – to take steps to terminate the contract as it won’t happen automatically. You can usually do this by serving a notice to the caterer’s estate or following the termination clause in the contract.  

You should also find details in the contract about what happens to any money already paid out, as in your case. 

It may say that the caterer’s estate can keep any prepayment you’ve already made, even if the obligations were not performed. If it says this, it will limit your ability to claim for breach of contract and get the money you’ve paid out back. 

Yet even if this is the case, statutory and common law control a party’s ability to limit its liability so this doesn’t mean it’s impossible to have the money returned to you.

It might also be considered a ‘frustrated’ contract.

A contract can be terminated on the grounds of frustration if something happens after it’s made which mean it’s no longer possible to finish.

For something to be considered ‘a frustrating event’ it needs to have happened after the contract is entered into, be a fundamental act that strikes at the root of the contract, be no fault of either party, and it needs to make the contract impossible, illegal or radically different from when the parties first entered into the contract. 

You, as the surviving party, could argue that a frustrating event has occurred. This is because, the caterer died after the agreement was formed, the death goes to the root of the contract and was unlikely to be contemplated or foreseeable by the parties at the start of the contract, it was not the fault of either party, and it’s now impossible for food for the wedding to be provided by the caterer. 

If it’s decided that a contract is frustrated it means neither party is obligated to comply with its terms and if any further funding is due it is no longer payable.

Money already paid can also be recovered. This comes if the Law Reform (Frustrated Contracts) Act 1943 (the “Frustrated Contracts Act”) applies. The Frustrated Contracts Act states that money paid before the frustrating event (death) can be recovered.

If this happens the money will need to be paid to you by the caterer’s estate.  

Once you’ve read the contract, especially any clauses dealing with death, frustration or liability, you then need to contact the representatives of the caterer’s estate to see if an agreement can be reached and your money can be refunded. 

If you had wedding insurance, it’s also worth checking your policy to see if you can recover the money through your insurer. 

As a last resort, if you aren’t able to come to an agreement with the estate, you will need to issue a debt claim through the caterer’s estate. Also known as a money claim. You’ll need to pay court fees for doing this which will be around £200.   

Paul Britton, director and solicitor at Britton & Time

About our expert: Paul Britton is a top litigation legal expert and founder of Britton & Time, a multi-award-winning law firm based in Brighton & Mayfair. Paul graduated from the University of Law, Guildford in 2014 and has been qualified as a solicitor since 2017. 

Coming from a multi-legal background, Paul supervises all practice areas at Britton & Time. Paul primarily works on litigation matters, both civil and criminal, family issues, employment matters and landlord and tenant dispute, and continues to act for clients on a variety of matters both from the Brighton & Mayfair office.

Mouthy Money Your Question Answered compiled by Rebecca Goodman

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Mouthy Money Your Questions Answered panelist Karina Hutchins answers a reader’s question about being able to get extra cash in their mortgage above the house value to conduct renovations.

Question: My partner and I are first-time buyers nearly ready to buy a house. We can afford something around £200,000 with our deposit but we’ve seen a house that needs some work, but has a lot of potential, for £180,000. Would we be able to ask the bank for extra cash in our mortgage above the house value to conduct renovations? We don’t have the extra funds ourselves to do the work that is required.

Answer: Before the financial crisis of 2008, it was common to find mortgage loans up to 120% of the value of your home.

However, this level of debt left people in negative equity (where you have more debt than your house is worth) meaning they became mortgage prisoners, as without equity, they couldn’t afford to sell their home or change their mortgage deal. As such, mortgages above 95% of the value of your home are no longer available.

I would see if it’s possible to buy with a 5% deposit and use whatever funds you have left over to start renovations.

If you require further funds, you can wait six months after the mortgage starts to apply back to your lender for a further advance. They will revalue your home and maybe you will be able to withdraw further funds if you’ve created more equity.

This could work well as house prices have naturally increased by 10-15% over the last 12 months and you can look to improve the property as much as possible with the deposit money you held onto.

YOUNG MONEY: If you’re 18 – 29, we want to hear from you! By taking our quick survey, you’ll be in with a chance of winning a £100 shopping voucher from your choice of Amazon, John Lewis or M&S – plus four £20 vouchers up for grabs too.

Alternatively, you should look to save funds or seek affordable borrowing elsewhere which isn’t secured against your home. If you do take out new debts, please ensure you can afford the repayments in additional to your mortgage and other outgoings.

Karina Hutchins is Head of Mortgages at Open Money

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