42% price increase

I’m just wondering why I have just been given a 42% price increase?

I’m £192 in credit (2.5 months) I pay £75 per month but I’ve just got an email that says my payment is going up to £116 per month. So the email states that fuel prices were going to be increased automatically in November, I’m just interested to know how much of the 42% is the increase?

And why so much in one go, all my previous suppliers have done the same and ended up with a large sum of my money, which they are quite slow to relinquish, even after being asked nicely.

It just seems like companies want to hold people’s money nowadays. I’m happy to pay the fuel increase and a nominal extra payment, but I already have savings, I don’t need Bulb to act as a bank. Thank you.

I agree Dave, I have also received an extortionate increase email and have told Bulb that unless t ey sort out a reasonable monthly payment, I am leaving. I am appalled by this and I thought Bulb was ethical!

I have had the second email saying they will be increasing my payments on dec 1st, can they do that if I am in credit? I will leave if they do with a conversation, they want to nearly double my payment!!!

You should be able to go to your account and then:
My account and tariff info
And change the payment ,
bearing in mind you may need to top as required if you fall below the monthly advance payment level.

The problem with these £100 payments to referrals is… we have to pay them, bulb does not pay them, that cost gets distributed amongst the customers, even if those who have benefited have moved on. If I have accrued £192 in the few months I’ve been a customer, I must already be paying 40% more than I am using.

Being old, experience has made me cynical and I’ve often seen cases where an excessive amount is asked to make the real amount seem not so bad. So am I being asked for 42% so when I’m told I only need to pay the fuel increase (for arguments sake) is 25% I think great, I am saving 17%

Being old, experience has made me cynical and I've often seen cases where an excessive amount is asked to make the real amount seem not so bad. So am I being asked for 42% so when I'm told I only need to pay the fuel increase (for arguments sake) is 25% I think great, I am saving 17%
I agree we get nothing for nothing these days we just have to be more `street wise` when it comes to paying out money, do our research and then decide if it is better value than some other company. Same applies to house/car/travel insurances they pay mega money for advertising which will be included in their premiums. Over the last 5 years or so I reckon I now pay around £1000 less per year for these things than I did back then.

Hi,
I have had a 200% payment increase!
I have just altered my monthly payments myself to something more affordable and made a top up payment too.
But what has made me angry is that the original monthly estimate when I first joined was so low, when they had all the information from my previous supplier and should have been more accurate. I’m sure this was done to entice me to join - which it did, but then to send such a shocking price hike a year later is misleading and underhand, in my opinion.

Hi, I have had a 200% payment increase! I have just altered my monthly payments myself to something more affordable and made a top up payment too. But what has made me angry is that the original monthly estimate when I first joined was so low, when they had all the information from my previous supplier and should have been more accurate. I'm sure this was done to entice me to join - which it did, but then to send such a shocking price hike a year later is misleading and underhand, in my opinion.

I am unable to comment on the 200% increase.

When you first asked for a quote off Bulb did you put in your annual energy usage which would have been shown on your previous suppliers bills?

If you didn’t do this then your initial quote woudl have been based on a typical property energy use which wouldn’t necessarily have been as accurate as putting in your previous annual energy usage.

I’m a customer the same as you and I most certainly wasn’t hoodwinked I made sure I entered my annual energy use and keep an eye as to whether it is worthwhile switching to another supplier when a price increasable happens, all suppliers have increased their prices.

Hi @DaveThePensioner @manb @scudo @Duffinya and @shopsquirrel

Thanks for your comments. I’ve left this post on another thread where similar discussions are happening.

It explains a bit more about the payment review process and why we suggest you increase your payments despite having money in your account at the moment.

We’re working hard to communicate clearly with our members so your feedback on this is important.

@DaveThePensioner, @“Will at Bulb” 's recent community post explains a little more about the referral programme.

Referrals have no impact on the price that you pay for your energy.

We’d rather give the money that we’d otherwise spend on marketing back to our members. It also means that our members are more likely to stick around a little longer.

@manb I’d be happy to have a chat in private message about your energy bills. As this is a public forum, it’s best not to discuss the details on here. Just drop me a message :slight_smile:

I’ve written a community post about how we calculate your monthly payments on this discussion.

Referrals have no impact on the price that you pay for your energy.

We’d rather give the money that we’d otherwise spend on marketing back to our members. It also means that our members are more likely to stick around a little longer.

That is not true, it may be what you are led to believe through company memos and spiel but the truth is, all companies have income which is just expenditure and profit… the income comes from customers… whether the expenditure goes to referral schemes, advertising, mail drop, executive research trips to the Bahamas, or all the catering for the xmas party… that all comes from customers… which means if expenditure rises from referral schemes (or anything else) the customer ultimately pays.

I’ve been on the other side and have been in a position where it was my job to use the smoke and mirrors :wink: but why are we just not told how much the price rise is? why is it behind an “increase to meet next years winter”

Also, if you want to give it back to the members, just knock 0.1% off everyones bill.

I have no problem with transparency, If bulb are raising fuel prices by 42% I’m happy to pay, I just don’t like having a price rise hidden in this method.

I am in the same boat as all of you above. I went into my account and changed my monthly payment back to what it was before they “upped” it. I submit my meter readings monthly and bulb email me the cost of my bill in advance of taking payment, if “winter use” means my standard payment doesn’t cover my bill, I will up it myself.
I also became “in credit” by £80 or so, a message I left on this forum resulted in private email from a member of staff and the full amount of credit was refunded to my bank account.

Hope this helps someone

By the way… I find bulb VERY easy to deal with… absolutely no complaints from me!

@Dave the Pensioner

Energy companies, including Bulb, have very fine profit margins. The majority of your monthly bill goes towards buying energy as well as paying our energy specialists and product developers. In fact, only about 4% of your energy bill is profit.

Our mission is to help people across the UK to save money on their energy bills and reduce their carbon emissions. We don’t hide the fact that we’re a for-profit business. It’s important that we make some profit to reinvest back into growing. By doing this, we can help more people to be a part of our mission. Both advertising and referrals are a part of the way we can achieve this.

We emailed every member letting them know that our prices were going to be increasing. Ofgem requires that we give 30 days notice. We give 60 so you have plenty of time to decide whether you want to stay with Bulb or switch away. In this email, we told each member the how this would impact the cost of their energy and what their revised annual statement is.

When costs fall by more than £20 per year, so will your tariff.

It’s important to separate the price rise that affects all our members, to the payment review that only a fraction of our members received. I’ve written about it in a lot more depth here. But, in short, we need to keep our member’s account above £0. This way we can buy our energy in advance and pass the savings on to you. Payment increases were suggested to member’s who, at their current monthly payment, will have a debit on their account.

@Dave the Pensioner

Energy companies, including Bulb, have very fine profit margins. The majority of your monthly bill goes towards buying energy as well as paying our energy specialists and product developers. In fact, only about 4% of your energy bill is profit.

Our mission is to help people across the UK to save money on their energy bills and reduce their carbon emissions. We don’t hide the fact that we’re a for-profit business. It’s important that we make some profit to reinvest back into growing. By doing this, we can help more people to be a part of our mission. Both advertising and referrals are a part of the way we can achieve this.

We emailed every member letting them know that our prices were going to be increasing. Ofgem requires that we give 30 days notice. We give 60 so you have plenty of time to decide whether you want to stay with Bulb or switch away. In this email, we told each member the how this would impact the cost of their energy and what their revised annual statement is.

When costs fall by more than £20 per year, so will your tariff.

It’s important to separate the price rise that affects all our members, to the payment review that only a fraction of our members received. I’ve written about it in a lot more depth here. But, in short, we need to keep our member’s account above £0. This way we can buy our energy in advance and pass the savings on to you. Payment increases were suggested to member’s who, at their current monthly payment, will have a debit on their account.

However, the issue was you had said previously that the referral scheme doesn’t effect the prices, which is false. The referral scheme or any cashback reward scheme has a cost factor and must be recovered by the company as money doesn’t come from a magic tree which, in this case the money Bulb receives is through the service of supplying energy to customers and thus the prices for Daily Standing Charges and the Unit Price reflect the total revenue needed to operate (expenditure) and the remaining profit (which normally is relevantly low for energy companies in the region of 1%-4% of total revenue).

for example of 1000 people refer a friend to bulb and Bulb pays out a total of £100 in total that is £100,000 needed to found to pay for that scheme, and the only way get that money is increasing the tariff price to generate revenue to pay for those 1000 people.

Obviously that example is a bit simplistic compared to how business obtain liquid cash to pay for such schemes.

So the scheme does effect the price of the tariff directly, but it may not increase the price to a significant margin that is noticeable. Just like if you need more staff, you need more money to pay for those new staff members so you increase the price of the tariff.

However, the issue was you had said previously that the referral scheme doesn't effect the prices, which is false. The referral scheme or any cashback reward scheme has a cost factor and must be recovered by the company as money doesn't come from a magic tree which, in this case the money Bulb receives is through the service of supplying energy to customers and thus the prices for Daily Standing Charges and the Unit Price reflect the total revenue needed to operate (expenditure) and the remaining profit (which normally is relevantly low for energy companies in the region of 1%-4% of total revenue).

for example of 1000 people refer a friend to bulb and Bulb pays out a total of £100 in total that is £100,000 needed to found to pay for that scheme, and the only way get that money is increasing the tariff price to generate revenue to pay for those 1000 people.

Obviously that example is a bit simplistic compared to how business obtain liquid cash to pay for such schemes.

So the scheme does effect the price of the tariff directly, but it may not increase the price to a significant margin that is noticeable. Just like if you need more staff, you need more money to pay for those new staff members so you increase the price of the tariff.

I understand your reasoning, but this isn’t correct. The price it costs us to serve our members and the unit rates and standing charges our members pay will be exactly the same whether we have zero referrals or 100,000 referrals.

We base our unit rates on the cost of buying energy from generators and we base the cost of our standing charge on the cost of serving each home (hiring staff to answer the phones, paying transmission fees, etc), and then we add a small amount on top of that for our own profit. And since we have promised in our pricing principles that we will always lower our prices as soon as we can save an average home £20 a year, we have effectively capped the amount of profit we can make from each home.

The money we spend on getting new members to join Bulb, whether through referrals or other channels, comes from our profit. And if we ever need to raise more money to pay for more new members we either sell a portion of the business to investors to raise capital, or we take out a loan from a bank.

It’s also worth pointing out that we’ve designed our tariff so that if we were to increase our rates, it would directly negatively affect the number of new members joining Bulb. We only have one rate for all of our members and price is the biggest factor that people look at when switching. So if we want to keep growing, which we do, we need to keep our tariff low so that new members find it attractive.

However, the issue was you had said previously that the referral scheme doesn't effect the prices, which is false. The referral scheme or any cashback reward scheme has a cost factor and must be recovered by the company as money doesn't come from a magic tree which, in this case the money Bulb receives is through the service of supplying energy to customers and thus the prices for Daily Standing Charges and the Unit Price reflect the total revenue needed to operate (expenditure) and the remaining profit (which normally is relevantly low for energy companies in the region of 1%-4% of total revenue).

for example of 1000 people refer a friend to bulb and Bulb pays out a total of £100 in total that is £100,000 needed to found to pay for that scheme, and the only way get that money is increasing the tariff price to generate revenue to pay for those 1000 people.

Obviously that example is a bit simplistic compared to how business obtain liquid cash to pay for such schemes.

So the scheme does effect the price of the tariff directly, but it may not increase the price to a significant margin that is noticeable. Just like if you need more staff, you need more money to pay for those new staff members so you increase the price of the tariff.

I understand your reasoning, but this isn’t correct. The price it costs us to serve our members and the unit rates and standing charges our members pay will be exactly the same whether we have zero referrals or 100,000 referrals.

We base our unit rates on the cost of buying energy from generators and we base the cost of our standing charge on the cost of serving each home (hiring staff to answer the phones, paying transmission fees, etc), and then we add a small amount on top of that for our own profit. And since we have promised in our pricing principles that we will always lower our prices as soon as we can save an average home £20 a year, we have effectively capped the amount of profit we can make from each home.

The money we spend on getting new members to join Bulb, whether through referrals or other channels, comes from our profit. And if we ever need to raise more money to pay for more new members we either sell a portion of the business to investors to raise capital, or we take out a loan from a bank.

It’s also worth pointing out that we’ve designed our tariff so that if we were to increase our rates, it would directly negatively affect the number of new members joining Bulb. We only have one rate for all of our members and price is the biggest factor that people look at when switching. So if we want to keep growing, which we do, we need to keep our tariff low so that new members find it attractive.

When a consumer says oh the cost of energy is expensive or has gone up, the consumer doesn’t just refer to the actual cost of the actual energy charged by the unit (1KW) but the actual cost for you to supply the energy which has many factors but represented as Daily Standing Charge and The Unit Price. While your splitting hairs, about the cost of energy between daily standing charges and unit price, which is understandable, however, as a consumer the cost of energy to a consumers home is a factor of both Daily Standing Charge and Unit Price.

Furthermore, that explanation is interesting, why is there a major difference between credit and prepayment customer with respect tot he price per unit for each fuel? With your explanation that unit price for each fuel would be the same for both type of customers, however, the daily standing charges would be different, due to the extra cost in running prepayment system compared to the credit meter system.

Heya @JustSsavvy.

@“Will at Bulb” is out of the office this week so I’ll let him comment on the unit rate vs standing charge.

Furthermore, that explanation is interesting, why is there a major difference between credit and prepayment customer with respect tot he price per unit for each fuel? With your explanation that unit price for each fuel would be the same for both type of customers, however, the daily standing charges would be different, due to the extra cost in running prepayment system compared to the credit meter system.

Yes, the standing charge [EDITED] for prepayment meters is slightly higher. We have to pay for lots of extra parties to be involved with prepayment meters:

Payzone and Paypoint make it possible for you to top up at your local shop.
Siemens handle the transfer of funds and the delivery of keys and cards.
The network service provider transfers information between the two.

There’s additional hardware involved with prepay meters such as keys, cards and the machines in your local store.

However, many of our members prefer to be on prepayment meters despite the slightly higher charges. This is because you are in control of when, and how much, you top up.

Heya @JustSsavvy.

@“Will at Bulb” is out of the office this week so I’ll let him comment on the unit rate vs standing charge.

Furthermore, that explanation is interesting, why is there a major difference between credit and prepayment customer with respect tot he price per unit for each fuel? With your explanation that unit price for each fuel would be the same for both type of customers, however, the daily standing charges would be different, due to the extra cost in running prepayment system compared to the credit meter system.

Yes, the unit rate for prepayment meters is slightly higher. We have to pay for lots of extra parties to be involved with prepayment meters:

Payzone and Paypoint make it possible for you to top up at your local shop.
Siemens handle the transfer of funds and the delivery of keys and cards.
The network service provider transfers information between the two.

There’s additional hardware involved with prepay meters such as keys, cards and the machines in your local store.

However, many of our members prefer to be on prepayment meters despite the slightly higher charges. This is because you are in control of when, and how much, you top up.

@“Eleanor at Bulb” Thank you for the response, however, in previous comments by @“Will at Bulb” that the unit price reflected the cost of energy from the wholesale market, and the daily standing charge covered all the operational cost within bulb which included:

We base our unit rates on the cost of buying energy from generators and we base the cost of our standing charge on the cost of serving each home (hiring staff to answer the phones, paying transmission fees, etc), and then we add a small amount on top of that for our own profit. And since we have promised in our pricing principles that we will always lower our prices as soon as we can save an average home £20 a year, we have effectively capped the amount of profit we can make from each home.

so your explanation is contrary to @“Will at Bulb” explanation how the Daily Standing Charge and the Unit Price is Calculated, If we take Will explanation the unit price for credit and prepayment customers would be identical and the standing charge would vary for both customers due to the different operational costs involved. If we take your explanation; prepayment customers pay more in unit price and standing charge for operational cost and neither truly reflect the different cost involved in supplying energy and the context of what was said previous in this thread that the promotional offers etc effects the cost of the price of energy.

So which is it?

With regard to the idea customers choose prepayment over credit and are happy with that decision, is absolute rubbish and certainly doesn’t reflect the reasons why most customers have prepayment meters (ppm). The main two factor for customers having ppm are:

(1) They moved into a property that has the ppm installed.
(2) They have become in debt and an energy supplier has either had a voluntary agreement with the customer or received a court order granted for the installation of ppm.

With those main two factors, customer then have to be charged to then have their ppm replaced with credit meters at a cost of £120 (Bulb quoted cost) per meter. Faced with that absolute large cost and the little saving you will get wit the credit meter tariff, would result in either more money spent on energy for replacing to a credit meter or a saving a very small amount on their energy bills, seems lke no choice at all.

I would say customers are happy with bulb not because of their experience of ppm or the illusionary choice they had or have had to be with ppm or that poor sense of control, but, more accurately your customers are happy with Bulb because of the lower prices for ppm tariff compared to other energy suppliers.

@JustSsavvy I’ve edited my post to be clear:

The standing charge is different for prepayment meters given the additional charges from other parties involved.

@JustSsavvy I've edited my post to be clear:

The standing charge is different for prepayment meters given the additional charges from other parties involved.

Now that still doesn’t answer my question why is the unit price for each fuel different for Credit Customers and PPM customers when they should be the same as the wholesale price is the same for both, however, the supplying it to these customers are different which, is reflected in the daily standing charge.