Energy bill price cap predicted to go to £3850 - 3 x what it was a year ago

[cakeorwine]

There is an AIBU here - but really it's posting for traffic

Russia is having 'maintainance issues' so has reduced the gas flow to Europe to a low level.

Gas prices have soared again.

Price cap prediction - £3850 - about 3 x what it was a year ago.

This is going to affect all of us

www.theguardian.com/money/2022/jul/27/uk-energy-bills-forecast-to-hit-3850-pounds-russia-cuts-gas-supply-further-europe-pipeline

@MidnightMeltdown
Not all elderly feel the cold. It depends on how 'active' you are, how warm your property is, whether or not you like wearing lots of clothes indoors rather than heating
I'm old but haven't had heating on since early March, and that was only for a few hours.
I much prefer cold weather and hate temperatures higher than 20°c. I often go out in just a top or shirt plus jeans in windy, cold, winter weather, even snow.
Everyone's different and not all pensioners are struggling to heat and eat. I'm not and I'm on a basic state pension. I live very well without recourse to savings in fact I can even add to my savings.

You are right customers might decrease use

Do you recommend fixing the rate if for example it has doubled from usual?

I have no idea on what to do with the rates.

I am just being careful and seeing what happens. The fixes out there are scary.

I just know what I use and make sure we make changes to reduce our use.

@LoisLane66 lucky you then. Why are you on a thread about people struggling with energy bills then ???

I ve often wondered what companies would do if consumers cut use... after all, they are private companies and their sole aim is to make large profit.

I think that is the real reason behind the standing charge increases, this rubbish about taking on more consumers... they are making money out of these extra customers, its a ridiculous argument, what other company selling someting to the public would complain about having extra customers to sell too???

Another concern is if a division of a large company cannot make money in its consumer billing arm, do they just close it down?

Aside, i looked at my energy company Octopus, they are making so much money they invested in Japan and the USA's energy industries, thats on top of setting up a netzero division and investments in UK renewables.

@lollipoprainbow
I thought everyone was allowed to 'voice' to their opinions as to how to manage or calculate their bills, get better deals or correct the perception that all pensioners have to make hard choices

I do apologise if my comment made you feel uncomfortable or annoyed. It was meant to put the other side of the coin but I guess I should have counted on ruffling some MN feathers. Not everyone who 'manages' has a high income and I doubt this thread was only meant to echo and underline what the OP wrote. We all know prices will rise, so no need for every single person to comment saying the same thing 'We don't know how we'll manage' or 'My bills have gone through the roof'.

I thought everyone was allowed to 'voice' to their opinions as to how to manage or calculate their bills, get better deals or correct the perception that all pensioners have to make hard choices

I think that pensioners who are just on the State Pension and who stay at home a lot with low savings and who need to use their heating a lot will be finding this period difficult.

The State pension is £141 a week.

Even with support, a lot of that pension will be eaten up with bills.

Everyone is going to get the £400 government subsidy, credited via fuel companies.

Others need to check to make sure they are aware of the other support payments being made:

www.gov.uk/guidance/cost-of-living-payment

The problem with the £400 is that I know someone that lives in a HMO with electric included in rent, 7 flats in house - only one £400 going to landlord, whereas it should be 7 x £400. Poor people.

People with more than one property will get several lots - one for each account. Rich people.

My house is 5 beds with at present 5 adults over 3 generations living here. The oldest being my 85 year old wheelchair and housebound mum and the youngest being my mid 20s son and his girlfriend but they are saving to buy their own place which they hope to do sometime this winter.
Just looking at my ova online billing history and my highest monthly bill was £423.36 to cover the monthly 22 Dec 2021 – 21 Jan 2022 so before the first increase.
I am on a fixed income and am what is referee to as asset rich but income poor. My main asset being the house but I can’t downsize even if my son and his partner move out as the house is adapted for my mum.
I have already spent a chunk of my savings on insulation, new front door and boiler and I was lucky to qualify for a government scheme for free solar panels but I know I have no option but to be cold this winter. Last winter I was already cutting back on heating. Didn’t heat my bedroom and turned off one of the radiators to my lounge and mainly slept in that lounge. Mum need to be kept warm as she can’t generate body heat as she can’t walk or move around, she doesn’t even go to bed at night and is usually up watching tv and dosing half the night so I can’t even turn off her heating for the night. Her winter fuel payment of £300 doesn’t even cover one month of heating for her.
I can only hope the rest of my savings plus my income lasts long enough to keep her warm as she hasn’t got many more years left and I am not going to have her spend the time left to her cold and suffering.

this rubbish about taking on more consumers... they are making money out of these extra customers

No, they’re not. The current standard variable price cap rate means companies are losing money on every customer on that tariff - at the moment the wholesale price (ex VAT) is higher than the price cap rate (inc VAT), never mind the energy companies have to pay grid charges as well as their own staff. They are selling electricity cheaper than they are buying it.

Those companies which have hedged (bought ahead) won’t be so badly affected, but this explains why the fixed rates now on offer are so scarily high. If you take a fixed rate, the company has to supply you at that rate, and if they haven’t hedged sufficiently, they have to buy at the wholesale market rate, even if it’s higher than they are charging you. That’s why so many companies went bust - they hadn’t hedged enough and were forced to sell at less than they were paying for energy.

Companies could hedge for the customers they already had…. but not for the extra ones they have to take on when other companies collapsed. So they need funding for the difference. There’s also the small matter of the credit balances those customers held with their previous suppliers - that money’s gone, but needs to be given to the new supplier so they can credit the customer with it.

Thats where the standing charge increase is going.

You can see what has happened to the wholesale price in the right hand column here: energy.guylipman.com/sm/electracker

@PuzzledObserver If they are not making money, then how are they making significant profit?
I'm talking about the billing arm, not the parent company that is involved in exploration?

The companies left in the market now all have hedged, often many months in advance.

Wholesale price for electricity peaked at 17p p/kwh in May 2022.

www.energy-stats.uk/wholesale-energy-pricing/

When one of the energy companies did this, they were accused of being out of touch and insensitive. I thought at the time it was a ridiculous reaction to what was (mainly) sensible suggestions.

My son's rent for his student house includes energy bills for the next academic year. I dread to think how much it will go up by the following year but there will no point anyone moving out, because it wont be any cheaper anywhere else!

what were sensible suggestions (before the grammar police arrive)

Hanover in north-west Germany on Wednesday became the first large city to announce energy-saving measures, including turning off hot water in the showers and bathrooms of city-run buildings and leisure centres

Cold showers, yuck. If my local leisure centre does that I'll shower at home. But I guess that's fine, if I want a hot/warm shower I have to pay for it myself.

I always thought there wasn't much point washing your hands in cold water though?

I always thought there wasn't much point washing your hands in cold water though?

Not true - it’s the combination of the soap and rubbing which gets rid of germs, not the temperature of the water. If it was hot enough to kill germs, it would scald you. We just prefer warm water because it’s more comfortable.

But not all pensioners are on just the state pension, I think that’s the point. A proportion of pensioners are on a very comfortable income, have no mortgage etc.

When my Dad retired, his pension was higher than my full-time income - and I was paying a mortgage, while theirs was paid off. 30 years later, my Dad is long dead, I’m retired - and my Mum’s income just for her is higher than mine and DH’s put together.

We are OK, so logically she should be too. But life is not that simple - we have put a lot of effort (and money) into making our home as energy efficient as possible, and also, partly through awareness of climate issues, make choices which reduce our energy use. My Mum is just not in that way of thinking. I dread to think what her bills are like.

I can't understand why this isn't getting more attention in the news/media. It's a massive thing that is going to affect all of us...why isn't there more of an outcry about it?

I know the tories can only think about their leadership race right now but they are seriously going to lose voters if they are not seen to be stepping up and doing something to support the average person here.

The very large university where I work is finally implanting a policy of shutting down buildings overnight and at weekends. Apparently it costs £3k an hour in energy to keep them open.

Mine is 32.53 for electricity and 8.53 for gas. I fixed at the end of April. I think that these prices might be slightly above the current price cap, but I figured that it was worth fixing anyway, as I don't use much over summer, and I will be protected over winter (when I knew that the cap would almost certainly to rise).

14 degrees? That’s positively boiling. I don’t even get dressed until it drops below minus 4.

Current advice from Martin Lewis:

If you're offered a year's fix at no more than 70% above your current price-capped tariff, or 75% more if you very strongly value budgeting certainty, it's worth considering.

You may not feel the cold but that doesn't necessarily mean that it doesn't affect your body. For every degree that the room temperature decreases, blood pressure increases, and many older people already have high blood pressure and are at risk of heart attack or stroke etc.

Some studies have shown the low room temperatures are also linked to obesity as people tend to eat more calories to compensate for the cold.

There are good reasons why the minimum recommended temperature is 18 degrees.

Electric
28.08p per Kilowatt hourkWh
Standing charge
39.67p a day

gas
6.97p per Kilowatt hourkWh
Standing charge
25.92p a day

i am with ova on their Simpler Energy plan.
The cheapest fix they are offering at present is for 2 years at an eye watering £718 pm plus the deal has compulsory boiler cover at an extra £10 pm. This is a loyalty deal only and the general fix for new customers is over £800.