The beginning of the month is usually the time most people are sorting out bills and finances. But this month, there are additional considerations, since, from 1 October, energy bills are finally going up. It was only a matter of time, according to experts, after months of warning that inflation would impact energy prices. But what do price rises actually mean for you?
This does not constitute advice and advice should be sought in all instances before acting on it.
Essentially, if you have been using little energy and paying up to £1,500 a year, you’ll likely see your bills fall. Heavy energy users, on the other hand, will see their prices rise. There has also been talk of a £2,500 price cap, but your bill will be dependent on the amount of energy you use and the £2,500 figure merely refers to an average, specifically referring to the prices per kWh for gas and electricity for users paying by direct debit. If you use more, have a pre-pay meter, or pay after receiving your bill you could still pay more.
Also coming into effect this month is the £400 discount for energy bills introduced by former chancellor Rishi Sunak.
The Energy Bills Support scheme offers discounts to households on their next six bills or a payment into their bank account. Pensioners have an additional £350 winter fuel allowance to take advantage of, while those on disability have £150. Low-income families on benefits are set to receive an additional payment after already being given £326 thus far.
Some people have already received their bills and consequently, have seen direct debit increases much larger than they expected. If this has happened to you, don’t hesitate to reach out to your provider and request justification and a direct debit reduction.
Unfortunately, it seems like this is only the beginning. The Energy Bills Support Scheme’s discount runs out in April, and even though warmer weather should be on the horizon at that point, direct debits are unlikely to change as they’re meant to be a set amount to cover the entire year’s usage. Unless wholesale energy prices fall or the scheme is renewed, it’s tough to predict exactly what will happen.
To discuss the impact energy prices might have on your finances, get in touch with your trusted financial adviser today.