To wonder what will happen with gas and electric bills

[Cheesecakeandwineinasuitcase]

They seem to be going up approximately 50% every time the price cap increases. And if they go up another 50% that will be a 50% increase on the previously increased amount so it’s exponential.

It’s going to keep going up by 50% every 6 months isn’t it? And the chancellor seems reluctant to do ANYTHING about this. No windfall tax on energy companies, no restrictions on how much energy companies are allowed to increase their prices by.

I’m on a Facebook group that gives energy support and advice and I’m horrified at what people on there are saying their bills are increasing to.

What’s going to happen? Are we all going to end up thousands of pounds in debt? It feels like these companies have been given free rein to increase their bills to whatever they want and profiteer at the expense of people losing everything.

They seem to be going up approximately 50% every time the price cap increases.

It’s going to keep going up by 50% every 6 months isn’t it?

What makes you think that? I agree more support needs to be put in place by the government and the current offerings are laughable but I don’t understand why you are saying the prices will go up 50% every six months. I’ve seen nothing that suggests that.

@luxxlisbon

They seem to be going up approximately 50% every time the price cap increases.

It’s going to keep going up by 50% every 6 months isn’t it?

What makes you think that? I agree more support needs to be put in place by the government and the current offerings are laughable but I don’t understand why you are saying the prices will go up 50% every six months. I’ve seen nothing that suggests that.

I follow Martin Lewis on Facebook. So the price cap is going up going up by another 54% this April. I thought it was another 50% from October but looking online it looks like current estimates for October vary greatly - I’ve seen 29% and someone on the group said they’ve seen an estimate of 42% so It looks like it will be another big increase. Martin Lewis recently said predictions point to yet another increase the following April. So it seems like these massive increases are continuous.

This is why I’m worried - people on the Facebook group have shared screenshots of energy quotes that are in the thousands.

Cap was £1,270

Went up to £1,693 in April (+54%)

Projected to £2,800 to £3,500 in October.
Thats the range that analysts are commenting on right now. So 100% more is possible from £1,693

One of the main problems we have is the high electric standing charge.

The rescue of Bulb is proving even more costly than expected, so that charge is likely to go up even more (north of 60p/day)

Households cannot survive a winter at those prices.

Either Sunak intervenes, or the whole country walks into a disaster.

People wont be able to pay, they may get cut off, old people will start to die of cold, there will be social unrest, rioting.

@Babyroobs

People wont be able to pay, they may get cut off, old people will start to die of cold, there will be social unrest, rioting.

People will start rioting because it’ll be warmer outside than in, it’ll be a good excuse to get out in the warm! I was reading an article the other day about a woman who just rides buses all day because she can’t afford heating.

People who can’t be cut off will stop paying their bills and everyone else will either have to go without other things or be cut off. It’ll be unbearable for many people.

Yes I think if it continues longer term we might see more young adults moving back in with family, older people moving in with family or older single people doubling up and moving in with each other temporarily to heat just one home rather then 2/3. My 85 year old dad is not struggling for money but he rattles around on his own in a big four bedroom house. It may make people like him think about moving to smaller more manageable retirement properties if it's going to be a longer term thing. maybe more young people will house share.

On the flipside people will use less energy, which is good for the environment, swings and roundabouts I suppose

It is pretty grim and I understand your concern OP

I also suspect a lot of people currently wfh will suddenly be begging to go back to the office, although I guess heating costs have to be offset against petrol/ diesel costs.

There was something in the paper today predicting costs of

£2800 Oct (Average home)
£1969 (April 23)
£1880 (October 23)

So increase then decrease.

However in Oct 21 it was £1277 so still 50% higher by next Oct 23

I'd take assumptions about price drops in the medium future, with a pinch of salt, though I'd love the comfort of beleiving in them.

For the last 2 years there have been assumptions about short term pain but longer term 'returning to normal' in a variety of things - and so far they are not playing out that way.

What is clear to me, is that current government haven't got a scooby how to handle things. They are also playing the 'fingers crossed it all works out' tactic. Which is not very reassuring.

We'll all get into massive debt and our homes will be repossessed, many will die, from cold related illnesses or suicide. We will all end up 'owning nothing' as is the plan, then there'll be a Universal living wage and we'll all be fucked.

no restrictions on how much energy companies are allowed to increase their prices by
these companies have been given free rein to increase their bills to whatever they want
What do you think the Price Cap is? It is a restriction on how much energy companies can charge - so they do not have free rein to increase prices to whatever they want.

seem to be going up approximately 50% every time
When it was first introduced the price cap was £1137. Subsequent caps were £1179, £1162, £1042, £1138, £1277 and from April 2022 it will be £1971. Until now, the biggest increase was 12% and it fell by 9% in October 2020.

@jcyclops

no restrictions on how much energy companies are allowed to increase their prices by these companies have been given free rein to increase their bills to whatever they want What do you think the Price Cap is? It is a restriction on how much energy companies can charge - so they do not have free rein to increase prices to whatever they want.

seem to be going up approximately 50% every time
When it was first introduced the price cap was £1137. Subsequent caps were £1179, £1162, £1042, £1138, £1277 and from April 2022 it will be £1971. Until now, the biggest increase was 12% and it fell by 9% in October 2020.

Have you seen the post by bambina above? They are projecting it will increase to between £2800 to £3500 from October. If this happens and it goes up again from those prices the following April then it will be disaster for many families. I’ve been on the energy board on the Facebook group and have seen first hand how this is starting to affect people.

I think a lot of people don’t fully realise this will affect them probably either because they are still on an existing fixed rate or they don’t realise they are going to get a massive increase to their bill from April.

Im losing sleep over this hence why I’m posting at 4.15am in the morning.

What I don’t understand is how the French government were able to limit companies to maximum increases of 4% and take the hit whereas our government haven’t done anything like that. Labour say they want a windfall tax on energy companies but again our chancellor has dismissed this idea. Why?

@BDHS1

There was something in the paper today predicting costs of

£2800 Oct (Average home)
£1969 (April 23)
£1880 (October 23)

So increase then decrease.

However in Oct 21 it was £1277 so still 50% higher by next Oct 23

I really hope you’re right but sadly I don’t think it’s the case and that this is the tip of the iceberg. I do wonder if the chancellor is using this as his tactic to get in a Tory win in 2024 by suddenly finding and promising the means to fix this problem if we vote them in. I hope people won’t be fooled by this.

@BDHS1

There was something in the paper today predicting costs of

£2800 Oct (Average home)
£1969 (April 23)
£1880 (October 23)

So increase then decrease.

However in Oct 21 it was £1277 so still 50% higher by next Oct 23

The UK is totally exposed to global gas prices.

That cost to us only goes down if the price of gas in the world market goes down.

And the only way that happens quickly is if the supply from Russia goes back to normal.

Obviously, that is not going to happen.

So what we're left with is high gas prices until more of it can be supplied by US, Norway etc..

Thats why that downward trajectory you posted is unlikely.

Will it go down from the October 2022 peak?
(£2,800 to £3,500)

Yes. But much more slowly as the gas from Russia needs to be replaced by the market. This will likely be a chaotic, volatile process as Putin will likely make it so.

If you take a look at inflation expectations, you will see that they are still looking at 5% inflation in the UK by end of 2023. That is food + petrol + energy.

£1969 by April 23 is very optimistic.

Also, one thing that is hard to estimate is just how bad winter 2022 will be. If its a cold one and people use more gas than average (even after cutting down), that demand will drive prices even higher due to scarcity. That £1,969 that you quoted will then be impossible.

Either way this ends up, the country cannot absorb energy prices that high without support. The numbers quite simply do not add up for a material amount of people.

And that is only consumers (individuals). Price cap does not apply to businesses. Many will likely go under.

I imagine people will just end up not paying their gas bill, and I don't think companies will/be allowed to cut people off.

Was all this set to happen before the Russians invaded Ukraine? I heard lots of talk about it on the radio beforehand.

I see someone has mentioned people wfh will want back into the office- might be too late for that now - there is no price cap for businesses so might be that the office is no longer there. I think one way or another we are all screwed.

@BambinaJAS

Cap was £1,270

Went up to £1,693 in April (+54%)

Projected to £2,800 to £3,500 in October.
Thats the range that analysts are commenting on right now. So 100% more is possible from £1,693

One of the main problems we have is the high electric standing charge.

The rescue of Bulb is proving even more costly than expected, so that charge is likely to go up even more (north of 60p/day)

Households cannot survive a winter at those prices.

Either Sunak intervenes, or the whole country walks into a disaster.

This. Prices just can't keep going up and up or even stay at the current levels without pay increasing to compensate. A year or two ago you could get a fix at under £1000 a year for typical use. Now the price cap is the cheapest option and from April is more than double that amount, with further increases predicted in October.

That's thousands of pounds out of the budget and millions just don't have this money.

There's also millions more where the extra costs mean that some or all of their disposable income has vanished. So they can't spend on anything that's none essential.

My suspicion is that the government will gradually introduce various schemes that will ensure the poorest dont literally freeze - discount/capped schemes for those on benefits etc, subsidies for elderly etc. The squeezed middle will suffer most - those not quite eligible for help, who won't starve paying it but will no longer be able to afford anything beyond the basics.

@PearPickingPorky

I imagine people will just end up not paying their gas bill, and I don't think companies will/be allowed to cut people off.

They won't, they'll install pay as you go meters. Then people can either pay or not have any energy in the house.

What I don’t understand is how the French government were able to limit companies to maximum increases of 4% and take the hit whereas our government haven’t done anything like that.

France has the highest taxes in Europe - approx 40% higher than the UK.

UK tax revenue stands about 33% of GDP (as it has throughout this century, and is expected to rise to 36% over the next 5 years). UK govt spending is 41% of GDP.
France tax revenue is just over 46% of GDP and spending is over 56% of GDP.
If the UK increased Income Tax and VAT to 28%, and other taxes by a similar amount, we could spend money like France can.

EDF is 85% owned by the French government. It can be forced to sell its electricity at cheap prices to French customers. It is not free to sell to whoever it wants such as neighbouring countries, even though it could sell at a much higher price. Only 7.5% of its electricity is generated from gas (UK 38%) so it has been minimally hit by the current gas price problems. About 85% of UK homes are heated by gas, in France it is 40%.