If Friday 26 August is not called Black Friday 2022 yet, it should be. It was the day that the majority of households and businesses realised the trouble they are going to be in if they want warmth, light, working equipment or tools, and local shops. If they want to keep their business open, to live their life as they are used to.
Energy bills skyrocketing
Because things changed. Life changed. Why? Ofgem published their ‘price cap’, and everyone is going to have to pay insane amounts for their gas and electrics. And this is for those who pay by direct debit, people on pre-payment meters or who pay the bills as they get them will see their bills rise even more.
And if householders think they are in an impossible position, spare a thought for business owners. There is no cap for businesses, so they get charged whatever their supplier wants to charge.
Of course the cap is a maximum, suppliers don’t need to charge that, they are free to charge us less. But that is not going to happen. As from 1 October, a household with an average energy consumption is going to owe £3,549 per year (£295.75 per month!).
And that is not the end of it for householders, Ofgem has changed how often it reviews the cap, so instead of having this remain the same for at least six months, there will be a further review (read: raise) by January 2023. And then again by April 2023. The total amount householders are likely to be paying is expected to rise to £6,616.37 by that point.
Cost-of-living scandal
People are likely to go into debt. For pensioners, with a state pension of £9,627.80 per year, a yearly energy bill of £6,616.37 will eat up about three quarters of their income, leaving them with just over £3,000 per year for all other expenses.
And businesses? There is no cap for businesses, and many will see their energy prices going up by 350% or more. This means staff lay-offs and business closures, and this will affect us all. Think about your local GP practice your local chippy, a bed and breakfast or hotel where you help out on reception or cleaning, your local cafe or restaurant where you like to celebrate a birthday. Already this week several pubs have announced their closure. Some business owners are feeling suicidal because they see no way out.
Is this fair? The Good Law Project thinks not, and is planning to sue Ofgem for failing in its duty to carry out impact assessments of the rise, and to consider mitigation for the most vulnerable customers.
Martin Lewis from MoneySavingExpert.com has tweeted a lot about this so-called ‘cap’. He explains why the government’s help for low-income families is not good enough, as the cap has turned out to be considerably higher than was expected April this year when the support packages were announced.
He has produced a video to explain the price cap and answer some of the most frequently asked questions:
And a calculator to help people calculate exactly what the cap means for their own situation.
How to reduce energy costs
Of course, there are things you can do to reduce energy use:
- Don’t leave your lights on when you’re not in the room
- Don’t leave modems, televisions or computers on ‘standby’
- Turn the heating down one or two degrees and only have the room where you are mostly during the day at a comfortable temperature
- Use the microwave instead of the cooker, as that uses less energy
- Turn appliances such as the microwave off at the wall if they are not in use, do you really need it to show you the time?
- Only use the washing machine or dishwasher when they are full, and try a lower temperature
- Use a shower rather than a bath if you have the option
- Don’t use a tumble dryer but hang your clothes over maidens (yes, like grandma used to do).
And most importantly: vote for a different government, one that cares for the people in this country. On the continent, governments have managed to reduce the impact of the energy supply problems for their residents. Here in the UK this has yet to happen.
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