The Energy Crisis – 4 Things You Can Do
If there’s one thing most people are impacted by financially, it’s the energy price crisis, where the price we pay for energy is set to rise significantly over the next year at least.
Why are energy prices rising?
In 2019, the energy price cap was introduced which set a maximum figure that can be charged to customers for gas and electricity usage. The cap is based on a number of factors – one being the wholesale cost of power in the previous six months. Repeated increases in wholesale gas prices are the principle driver of rising bills.
On 1 April, the price cap is going to rise by 54% and again in October, where experts are predicting another 50% rise minimum.
What does this mean for us?
If you’re currently on a fixed energy tariff, the price cap doesn’t affect you until your tariff ends.
If you are on a variable energy tariff then suppliers will use the high price cap as a guide for their variable tariff prices – so expect to see increased bills.
What can you do?
Budget budget budget.
Price rises are happening, we can’t hide from them. You should think about adjusting your budget and either increasing your monthly direct debit payment or putting additional funds to one side in an energy sinking fund.
Turn your thermostat down a degree…
Easier said than done and we need to make sure we are prioritising our health and wellbeing, but Which? found that turning your home thermostat down by a degree could save us up to £85 a year.
Other tactics could be to use a timer to switch off heating at night and during the day, especially if the house is empty for some of that time, as well as turning off appliances that are not in use.
Check the government schemes.
Council tax rebate – those in council tax bands A to D will get a £150 rebate in April/May to help with energy costs in England, Wales and Scotland – Northern Ireland to confirm.
£200 energy scheme – all electricity bills (including prepayment) in England, Scotland and Wales will be reduced by £200 in October, and this will be taken back through a flat £40/year for five years.
Consider switching – but don’t get your hopes up!
There are very few deals out there right now that would mean its mathematically a good idea to switch. With a price hike in April and a price hike in October, you would need to fix at such a rate that is substantially below April’s rise and below October’s rise to make it financially worth it.
What to do if you’re struggling to pay
Your energy supplier has to help you come to a solution if you’re struggling to pay your bills, such as paying off energy debts in instalments, paying off energy debt through any benefits you may receive or even being eligible for a grant or scheme that your provider or charities have in place.
The important thing is take action and try not to ignore the reality of rising energy prices. Remember you can do your budget using Financielle Premium and feel safe in the knowledge you’re covering all bases and weathering the energy price rise as best you can.