What exactly is happening with energy prices?
With many of us feeling the panic and the pinch at the moment (years of pandemic really take their toll), the mass media hysteria regarding the impending increase in energy bills has come as rather an unwelcome piece of news.
However, it is always worth equipping yourself with an understanding. With this in mind, we speak to our very own financial expert Jasmine Birtles to see if any of this can be avoided.
- How large is this hike?
- What are you recommending people do?
- Should people change suppliers?
- Any chance it will even out?
- How can we support and help our older relatives?
Jasmine Birtles: They’re saying that energy prices could double in the next year.
JB: Firstly, I’m calling (along with GBNews) for the removal of the 5% VAT tax on energy prices. That wouldn’t make a massive difference but it should reduce the average annual household bill by £100 which would be better than nothing. I would also very much suggest a removal of the 25% green levy. It isn’t something that we can afford on our bills and should be moved elsewhere or simply lifted temporarily. Both of these moves could be done by government and done quickly if there’s the political will.
For individuals, firstly go through all the tips and tricks we have in our articles on MoneyMagpie, but also, for those on very low incomes, go to Turn2Us.org to check that they are getting all the benefits they are entitled to. They also have access to special grants (free money) on that website so it’s worth applying there. It could also be helpful to speak to your local Council to see if they can help with a cash injection. Currently Age UK is campaigning for the removal of the 5% VAT tax and extra help for pensioners so if you are a pensioner it’s worth going onto their website too to see what help is available.
JB: At the moment, it’s probably not worth it. Better to check with your current supplier that you’re on the best rate they can offer. However, it can’t hurt to look on a comparison site (link to ours) to see if one of the other providers has a much better deal. It’s likely that they won’t but take a look anyway.
JB: Yes. Energy is a very cyclical product. Just a year ago they couldn’t give gas away! There are many possibilities for improving the supply and distribution of both gas and electricity, including the Russia pipeline (currently being held up by both the EU and NATO), the building of a new nuclear plant int the UK which should be online by 2026 and the possibility that authorities will finally look into the pros and cons of fracking.
This would hugely increase the domestic supply of gas in the UK. It’s quite possible that energy prices could reduce next year, depending on geo-political activities.
JB: One way to help is to make sure that all their drafts from windows and doors are sealed up. Even if that means putting cling-film over the windows and installing sticky-backed foam strips to the door openings.
If possible, help them get their home insulated (there are grants available for this – check out Gov.uk to find out more) and keep them supplied with warm clothes, warm bedding and cheaper heating appliances such as underfloor heating and storage heaters if possible.