Price Cap - Just announced

[swifttwist]

From £1971 to £3549. 80% rise. I have no words.

New figures:

Electricity
£0.52 per kWh
Daily standing charge: £0.46

Gas:
£0.15 per kWh
Daily standing charge: £0.28

Pensioners have a larger disposable income? I don't think so.

Some pensioners do though. My parents have far more disposable income than we do. And there are fair numbers like them too.

Before we are called out for not saving for our pensions, can I remind people about the pension schemes that have been lost, through no fault of our own?

But before making comparisons, a list of non essentials should be agreed. Much of the time we do have a little more than others but it's because our outgoings are much lower because we do without!

@lightand

It wont.

BUT if we nationalised North sea gas production and renewable energy production, the UK Govt would control the price of domestic energy, that, across the year is 67% of our needs, the other 33% we would have to buy at the market rate.

..and in the summer, when we have too much gas, we can sell that on the global market or better still to europe at a discount.. a buoyant EU economy benefits the UK :)

Ideally we would store gas too but thats many years away.

Where on earth do you get that idea from?

It’s a fact, unfortunately. From The Telegraph.

On average, pensioners have seen their disposable income outstrip working households by almost £1,000 over the past decade.

It comes as the Government said that the pension “triple lock” would be reinstated after it was put on pause during the pandemic, taking the annual payout for retirees beyond £10,000 for the first time.

However, Downing Street has insisted that the working population should accept pay rises below inflation, which is expected to hit 11 per cent this year.

And while pensioners have seen uninterrupted year-on-year real terms growth in state pension in a decade of wage stagnation, the main working-age benefit - Universal Credit, which goes to around six million people - has plummeted by over 11 per cent in real terms.

The triple lock ensures state pensions rise by the highest of inflation, pay growth or 2.5 per cent each year. This year it is all but certain that inflation will be the highest of those three. The Bank of England forecasts suggest it will be around 10pc.

Pensioner income increase

Historically, pensioner income has lagged considerably behind working-age adults but increasing generosity in pension payments has seen the gap halve over 20 years, analysis by The Telegraph has found.

Since 2010, retired households have seen their average disposable household income increase in real-terms from £23,959 to £27,704, according to the Office for National Statistics.

This is equivalent to a £3,745 - or 15.6 per cent - increase in available income after taxes.

Meanwhile non-retired households have seen disposable income increase from £29,529 to £32,397, an increase of just £2,868.

This spike in retirement income has been driven by the Government’s commitment to the triple lock, with almost half of old-age income deriving from benefits.

While average weekly wages amongst employees has increased by just three per cent after inflation since they entered office, the basic state pension has increased by almost 10 per cent.

This generosity is in stark contrast to weekly Universal Credit payment which, since their introduction in 2013, have been victim to often criticised year-on-year freezes.

A single adult claiming Universal Credit will have seen their weekly income from the benefit fall in real-terms from £95 to £84; an 11.5 per cent drop.

The increased generosity for pensioners has also come alongside an unprecedented increase in house prices - something that the current generation of retirees have uniquely benefited from.

Enjoying tax benefits

Equally, many pensioners continue to enjoy considerable tax benefits not open for younger adults.

The highest fifth of pensioners earn around £23,000 in income outside of pension income.

While a working-age adult would expect to pay 13.25 per cent of this in National Insurance contributions, adults over the state pension age do not.

The result is a reversal of a long-term trend: the proportion of working-age adults in relative poverty is now higher than pensioners, according to the Department for Work and Pensions.

But while cries of generational fairness - and even politicking - will be called following the announcement to increase the basic state pension by almost £800 a year, there is some sense to the announcement.

As of last year, it is still estimated that 1.7 million pensioners live in poverty.

And while old-age household income is catching up, the disposable income of the poorest pensioners is very low.

For the poorest fifth of pensioner households is just £10,461 a year, according to the Office for National Statistics.

In October, the energy price cap could hit £3,000, up from £1,200 at the start of the year.

The Government will help cover a portion of this increase, but with food and clothing price increases picking up speed - an £800 increase could save lives.

Yes that HS2 is an absolute waste of space

It is causing so much disruption in the local area

Ideally we would store gas too but thats many years away.

It's 5 years in the past, in fact. The UK government decided to stop subsidising maintenance of the Rough gas field storage facility in 2017, thereby cutting our gas storage capacity by about 70%. The government has had to beg Centrica to bring it back online, and will presumably have to pay even bigger subsidies now for this (and/or promise no more windfall taxes).

The fact remains that energy bills will go up again in a matter of months and then again in April. They’ll have to do something radical like nationalising the energy companies. They won’t like it but their hands will be tied. Giving out handouts to means tested groups is just putting off the inevitable that everyone will be need help in the end. Without it we won’t have an economy and society will start to collapse

And if they do help out it will all need paying back and the economy will still collapse

These energy prices are going to be here longer than this winter alone and even one year of support for businesses and homes is far more than the covid bailouts. It’s not sustainable, our standard of living is going to drop andthe harsh thuth is that we are going to have to deal with it. We must realise we can’t keep shaking the magic money tree.

The loud noise in the media, in forums and subsequent government handouts has just created a moral problem, where people now expect to be bailed out of every financial difficulty if they whing long enough, then in many cases continue wasting money on stuff they don't need and generally living without putting anything in reserve.

I cannot at all comprehend why the Tories bother with socialist policies seeing that nobody is ever grateful to them and just complain when the free money stops. The feckless will never vote for then anyway so they may as well just implement sensible fiscal and monetary policies and quit it with the free money.

This is a remarkably generous take on the last 12 years of Tory governance.

@Liebig 'generous' isn't the word I would use. It's basically 'shut up you plebs and be grateful for our generosity and by the way none of this is our fault and we didn't fuck up at all despite PPE deals for our mates, late lockdowns, massive corruption, lies, parties and oh yeah, the shittest form of Brexit we could come up with'.

A hardcore deluded Tory fangirl has spoken, basically.

@pointythings It's a shame, because the post was making an otherwise good point up until it decided to voice the party line of keeping the unwashed masses in their place, ever grateful for being allowed to exist at all.

Can't wait for Truss' vote of no confidence and an autumn GE at this rate. May as well get it started now, because no extra support for people beyond what is already listed more or less guarantees riots and mass unrest by Crimbo.

I'm grateful for the 400 towards to the bills , but I appreciate that it won't go far enough for many people this winter.

Just a word of warning for anyone thinking about reducing the temperature on their hot water tank, it’s recommended that you heat the water to 60 degrees to kill off any bacteria. So rather than reduce the temperature to save costs think about reducing the amount of time your boiler is on for rather than the temperature it is heating to.

I think a lot of people just don't get it, or don't want to give up extravagant lifestyles or make economies. Not everyone of course, there are many people who face genuine hardship and it's worrying.
I met a friend for lunch today. She turned up with a brand new Mulberry Bayswater bag. She doesn't earn a lot and has no savings. I'm financially better off but I can't justify spending that kind of money on a bag. I had my £30 bag from Next. Her attitude when I said I was worried 'don't worry, the government will bail us out'. I talked about things I'm planning to do to reduce our energy costs and she laughed. I'm fizzing with anger, and wonder how many people think like that.

@Veeragall I think people like your friend are in the minority. When we have Nadim Sahawi (a hardcore Tory) saying that people on £45k a year are going to struggle, it isn't just about a small number of people refusing to cut down on luxuries. It's structural and it's serious. We need to shield people from the worst effects of these price rises, we need to accelerate implementation of renewables and we need to invest radically in improving the energy efficiency of our housing stock.

That's going to cost money. It will pay itself back in the end, but people need to stop treating the economy of a country in the same way they treat the economy of a household. They aren't comparable.

@pointythings I completely agree. It's an absolute shitshow and I really hope most people aren't thinking like my friend. By the way, we are not young, we're people who grew up in houses where socks and jumpers were the norm as houses weren't heated in the way we are today.

If you nationalise, it reduces bills for ever more... then if/when Russia rejoins the fold and we get our act together on insulation and renewables, those part nationalised companies can be sold again, paying back the initial debt.

The requirement for substantial amounts of gas will be here for a decade or more.

What you are suggesting is a return to at the 1960s in a world that is in the 2020's.

The loud noise in the media, in forums and subsequent government handouts has just created a moral problem, where people now expect to be bailed out of every financial difficulty if they whing long enough, then in many cases continue wasting money on stuff they don't need and generally living without putting anything in reserve

I don't disagree with this in some contexts - some people definitely expect to be bailed out for poor decisions or just decisions that didn't go the way they expected them to (eg shared appreciation mortgages because house prices sky-rocketed and they didn't like the banks getting a massive cut, even though that was what they signed up for).

But you couldn't tell people they couldn't work without compensation (furlough) and you need to do something about energy costs to stop the economy collapsing. That said, I don't agree with cutting VAT or income tax because we need money for public services as well.

Govt has to step in or there is social and economic disaster, what would have happened if the ATM's closed down?

10/15m unemployed after Covid?

Most SME's go bust/ relocate to EU where they do offer support and 100s of 1000s die of cold this winter? plus the economy tanks.

The economy will not pay back such a debt. The cost burden of energy has already risen to the point that economic growth is basically untenable. Why else do you think we've been playing shell games via financial trickery to make out like our economy is healthy? We've been amassing truly colossal amounts of debt in the Western world to paper over the idea that we've basically hit our decline phase.

Nationalisation, aside from being far more complicated than people would want to believe, will not alleviate any of this pain now or imminently. If anything, costs will have to go up just to keep the lights on as is. To rebuild the infrastructure? Thats trillions for the UK alone. We don't have that money, and at the rate we're burning through our cachet as a stable democracy with a somewhat useful finance arm with a country attached, I don't see this improving any time.

The time to think about this was literal decades ago, before I was even born in the '80s. It's way too late to avert largescale devastation in our nation now. Same goes for Europe that sleepwalked into this with us.

Services make, what, 70% of our economic output? What happens when people reign in their discretionary income to such an extent as expected now?

Why would they relocate to nations that are imploding at the same time?

Europe's heavy industry is closing sites daily because of energy. Germany is in freefall economically at this rate. France has barely 50% of its nuclear fleet online, with public date rising due to trying to hold down prices for the public. Italy and Greece and Spain still have sovereign debt problems that will be exacerbated by the ECB approach to dealing with recession fears. Poland is having coal supply issues. The Dutch have the second highest gas prices in Europe. Norway is telling the rest of Europe not to rely on them exporting oil and gas as their hydro plants get hit hard.

Please, do tell me what Europe, the continent that decided to commit economic suicide this year, is going to do better for these SMEs?

YOU CANT JUST NATIONLISE NORTH SEA OIL.
UK, who own the subsea rights, and Norway who own their share if subsea rights, sold the rights to drill for oil to big companies like BP for contracts in excess of 30 years, some of which may have been renewed in the meantime.
Governments in both countries got a share of the profits and a share of the drilling rights.
Whereas Norway put their monies into a wealth account out of Norway, the UK used it to support unemployment.
Norway saved, we squandered, thinking the pot of gold would last forever.
This is just what I remember from when my exH was a SAT diver in the NE basin and Stavanger among other fields.
You cannot nationalise what isn't yours when you have voluntarily entered into iron-clad contracts.

All of this exactly. We (in general) will never be richer than we are today. We will never have as much 'energy' as we have now. Renewables will not be able to take up the slack. The economy will not be in growth again. And in real terms, hasn't been for ages. The best we can hope for is well managed decline.

This is what happened to my mum. she gets widows pension £167 but had a small work pension of £18. taking her to 186. This is about £3 above the pension credit eligibility. because of this she gets no help. If she had £3 a week less she would get pension credit. not have to pay council tax of £128 and not have to pay TV license. So that £18 a week pension makes her worse off than if she had actually not bothered to put into her work pension.
She is terrified of winter now. her usage is minimal anyway. but shes going to use about 50% of her pension on CT and energy and for that she gets to sit in a cold house.

@LoisLane66 Absolutely. Although, you can seize those assets against contract, like Chavez did in Venezuela. Speaking of, how are they doing these days? Hmm...

@MissyCooperismyShero Indeed. In my optimistic days, I see us having a shallow decline (even though the UK has more or less been on one for decades now). We get used to having and making do with less and reorient ourselves to be less material and vain, more social and caring.

On my less optimistic days, I rewatch Mad Max and imagine that, but in the UK in the vein of the third act of Threads.

We keep hearing about pensioners and people on benefits needing help but what about people who don’t fall into that category? Millions of families who work but don’t earn very much.
How the fuck are we supposed to pay these proposed bills?