There have been many ramifications of the cost of living crisis over the last couple of years or so, but perhaps one of the biggest areas where people will have felt the financial squeeze is their energy bills.
A steep increase in wholesale gas prices (which is what energy firms have to pay) led to a price hike for domestic customers and, although the energy crisis has affected many different countries around the world, the UK has borne the brunt of it somewhat.
This is largely because most households in the country use gas boilers to heat their homes, while gas-fired power stations are used to meet much of the country’s electricity needs. Poorly insulated homes are also making the situation worse, ensuring that it costs more to heat properties than it would do otherwise.
All of this has put increasing amounts of pressure on household finances. To help households meet the costs of energy bills at the moment, on July 1st this year industry regulator Ofgem brought in an annual price cap level of £2,074 for typical dual-fuel households paying by direct debit.
This cap is reviewed every three months so it may change in the future, but this is its current level – although note that your bills will also be based on how much energy you use, so you could end up paying more than that if your usage is higher than the average household.
There are other grants you may be eligible for that can help you cover the costs, such as the £300 pensioner cost of living payment, the £900 cost of living payment for households on means-tested benefits and the £150 disability cost of living payment, which could all be worth investigating.
Although bills are starting to come down slowly now, they’re still significantly higher than they were before the pandemic and experts are predicting that they’ll stay high until the 2030s, so finding ways to keep costs down will continue to be important over the next few years.
There are different ways you may be able to cut down your energy usage. For example, by turning appliances off standby mode, draught-proofing your home, turning off lights when not in the room, or turning the washing machine down to 30 degrees..
Little actions like this may be able to make a big difference over time..
If you are struggling with debt at the moment because of cost of living challenges, get in touch with us today to seek professional and experienced debt advice.
References:
https://www.ofgem.gov.uk/publications/customers-pay-less-energy-bills-summer#:~:text=The%20price%20cap%20protects%20around,updated%20on%20a%20quarterly%20basis.
https://www.businessgreen.com/news/4119636/power-prices-remain-elevated-late-2030s-report-warns#:~:text=In%20its%20latest%20GB%20Power,cost%20renewables%20capacity%20comes%20online.
