The cost of living crisis continues. Today we have found out that the energy price cap will rise by 54% in April 2022. What does it mean to your finances and the ability to heat your home? Let’s take a look.
What Is The Energy Price Cap?
The energy price cap is designed to keep customers safe. We all have different incomes and the price we pay for our energy needs to be fair. It details the maximum prices that suppliers in England, Scotland and Wales can charge customers for energy. This is on a Standard Variable Tariff. Those on prepayment meters are going to feel it too.
The cost of energy has been going up and is much higher than we are used to. There have been no cheap fixes to switch to and the advice has been to stay on the price cap. If the advice changes from staying on the price cap to switching and fixing, know what you need to do to switch. Also consider going through a cashback site to get a some money. The news we knew was coming is the rise in the price cap. It is an increase of 54%!
There is no help for businesses though. We’ve seen many energy companies fail to be able to keep going because of the rocketing prices. However there are also some companies who have announced record breaking profits. Shell announced more than fourteen billion pounds! Something isn’t quite right, but that’s an argument for another blog post, or my Twitter account!
The Government Has ‘Stepped In’
Half an hour after the 54% increase was announced, Rishi Sunak, Chancellor of the Exchequer, spoke to the House of Commons about the plans for Government support. To be honest, after the National Insurance price hikes for normal working people, as well as the Tory vote to reduce the taxes on bankers by 5%, it’s not worth a lot really. The Government is still taking with one hand and giving a tiny portion back with the other.
There will be a £150 payment to households which will be via a council tax reduction. As well as this, £200 is be offered, however will need repaying over the next five years. The idea behind it is to take away some of the initial ‘shock’ of the higher prices. However the fact it needs repaying, is more like a Buy-Now-Pay-Later scheme. No wonder Rishi got called Klarna Chancellor by one of the Labour MPs.
I wasn’t expecting much. Not after the increase in taxes for working people. However what I would like is a blanket ban on MPs claiming energy bills via expenses. It has been in the media that they claim for heating their second homes. That is our taxes paying for their second homes. When many can’t afford to heat their one and only home. What a country we live in!
Light In The Darkness
It’s worth highlighting a couple of positives in amongst the doom and gloom. We have two months to prepare for this rise. That’s two months further into the year, so hopefully better weather. This means you can turn your central heating down or off and start hanging your washing outside to dry. Days should be lighter so we can leave our lights off for longer.
7 Super Ways To Conserve Energy
Make Some Cash
One way of making some bonus cash right now is to switch bank account. You could get £150 for simply switching who you are banking with. Spring clean your finances too, check those direct debits, see if you can get cheaper broadband, cancel TV streaming services. One good thing is that thanks to the great work done by Jack Monroe, smart price and basics ranges appear to be making their way back onto the shelves and online. The cost of food has been going up too so shifting down a brand is one way to make your money stretch further.
I know it’s easier said than done, and it’s going to be tough definitely, but try to look at where you can save energy now to be ready and also where else you can save money or make extra money to help.
