Winter 2021, your energy bills and the price cap

In the last 2 weeks Saturday Times newspaper it has become more apparent just how tough our energy bills are going to get this Winter.

In previous blogs I wrote about how wholesale prices had increased so much this year vs last, that suppliers have no choice in increasing their prices for Autumn Winter 2021.

April saw the price cap increased many people's bills by around £96 a year and there is a new increase effective 1st October with the announcement being made imminently. (Now here)

It is likely this new increase due mostly to the wholesale prices will increase most peoples bills by another £100+ a year.

OfGem is the independent body that ensures energy suppliers don't overcharge us whilst giving the freedom for new suppliers to come to market. They have stated they are having no choice but to increase this cap again so that we can continue to get our energy.

According to ICIS the price reporting agency, power has tripled in a year to a 13 year high and gas prices are 6 times higher than a year ago.

Emily Gosden energy editor The Times

Unfortunately it will seem that another series of smaller suppliers will go bust in the following several months as their margins are already super tight - they pride themselves on cheaper supplies but this is simply not sustainable, certainly not in the current market. As Emily Gosden went on to say, there are still two or three companies offering contracts at under £1000 per year - that is 100 percent commercial suicide.

So why am I writing about this?

Two things:

1. If you find yourself with a smaller supplier be prepared for a move to another supplier if they do fail. OfGem looks after this process to ensure no one is without power and a lot of these large businesses do look after those who are transferred on short term preferential rates. It is therefore a good idea to be looking at some other tariffs with those companies who are more cash rich and can shoulder the burden these price hikes will have more easily. By all means sit tight and ride it out, no one has a crystal ball after all.

2. The new prices will be effective 1st October 2021 and will mean that a lot of suppliers will be charging the biggest increases seen since 2011. If you are within 49 days of the end of your tariff you can change suppliers without paying for any exit fees currently in the region of £25 per fuel. If you're on a standard tariff you may have enjoyed leaner prices in the last few months but this will change. Whatever your situation it is now that you should be looking to secure a fixed tariff to see you through the Autumn and Winter months. Suppliers are quick to react to OfGem increases in the cap so it is a good idea to start looking in the next several days and get your bearings.

Another £100 a year might not seem huge to some, but taking into account the £100 already this year, the likeliehood is we're all going to be paying another £20 a month on top of what we're already paying. For the average house of 2-3 beds with 2-3 occupants this means it's likely to be close to £100 a month for energy compared to less than £70 a few months ago.

Looking at a live quote just now with UW, I can see an average house using 2900 kWh of electricity and 12000 of gas is currently £96 a month, £1149 a year.

A standard tariff is, as The Times quoted, on average £1288 a year with a similar increase for prepayment meter customers.

The beauty of UW however is that you can seamlessly bundle in your broadband, home phone (currently on a subsidised £20 a month for 6 months package) mobile sim card (using the EE network) boiler & home cover plus home insurance for an all round great price and a simple to manage account with everything clearly shown and you get billed once a month for everything.

Another wonderful benefit is using the UW cashback visa card which gives you cash back off your bill, for literally everywhere you shop in the UK. Most people will get £15-25 a month back on the usual stuff they buy everyday, which if nothing else will pay for the price increases or a cinema date night each month!

It's great for budgeting too as you can see your balance easily via the app and add more if you need to within a few seconds. I like to move my spending money to this card so I know what I've got and can tell if I'm overspending pretty quickly!

Please do let me know if you'd like a quick chat to have a look at your situation and I'll do all I can to help. UW don't advertise on comparison sites so you'll not see our favourable rates side by side with anyone else. Please do come to me for an independent bespoke quote to add to your research. If you like what you see & when the timing is right for you, we can do all the switching over for you making it as simple as possible.

One thing is true, as a customer myself, the prices rarely change so I am confident my bills aren't going to spike in a years time other than industry issues that I've written about.

I'm all for an easier life with these things aren't you?

Household Bills - streamline & reduce

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Lucy