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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

To think £6,000 a year energy bills are completely unsustainable

307 replies

Butterflyfluff · 22/08/2022 08:27

Following on from this thread but quite unbelievably the projected figure has gone from £4,200 to £6,000 now.

www.mumsnet.com/talk/am_i_being_unreasonable/4607670-to-think-that-very-few-people-can-manage-ps4200-energy-bills?page=40

Where will this all end?

OP posts:
onthefencesitter · 22/08/2022 13:51

Bearsan · 22/08/2022 13:36

I suspect behind closed doors the government are saying things like
"What are they all complaining about? Why don't they just winter in the Caribbean like normal people and stop moaning?"

It's all getting a bit
"Let them eat cake"
And we all know how that panned out <hopeful>

no they are secretly thinking it might save the NHS a bit of money if the sick and old froze to death. Or that if old people and poor people could not afford their houses,they could buy them at a bargain.

Kanfuzed123 · 22/08/2022 13:52

dreamingbohemian · 22/08/2022 08:36

I mean clearly it's just impossible

The question is whether the government will do something now, or wait until it's already here and there's massive chaos and then throw together some half-assed plan that mostly only benefits their base (as always)

Most likely door #2

Getoff · 22/08/2022 13:52

christmas2022 · 22/08/2022 09:54

How is it a cap if it's potentially going from £1200 to 6k - surely a cap is capped not continuously increased??!

The cap is not their to protect consumers against rising wholesale prices, it's only job is to prevent the energy companies making excessive profits. If the wholes price of electricity and gas goes up, then the cap must go up.

Kanfuzed123 · 22/08/2022 13:58

FourTeaFallOut · 22/08/2022 10:32

There's no incentive to work if even putting in fulltime hours, you can't afford the basics for survival ie food and heating

I've seen people write this a few times. I'm not entirely sure what it means. If working full time only pays for the basic then working anything less ...won't pay for the basics. That's a pretty big incentive.

Meh I do sort of get it, you know you graft and you graft, break your back for maybe a small step up in work, and maybe a few extra K a year but now we are paying more tax than ever and the price of everything has skyrocketed, all that work was in essence for nothing as you’re worse off. I’d say it’s just morale crushing than anything.

theworldhas · 22/08/2022 14:03

Compared with Liz Truss' brilliant idea to get GPs to write prescriptions for energy bills.

she’s a lunatic, but she’s going to provide some great lols.

Walkden · 22/08/2022 14:04

"They would be in breach of international law because they would be taxing companies on profits generated elsewhere"

Yes but only in a limited and specific way and according to her previously published perfectly acceptable because of parliamentary privilege!

Getoff · 22/08/2022 14:21

LuluBlakey1 · 22/08/2022 10:28

No it won't. Ever. It never does.

The current wholesale price of electricity is about 25p. The most recent wind farm contract auctions were fixing prices at between 4 and 5p. As far as I know there will continue to be new contracts awarded every year going through to 2030, so although we already have a lot of wind, there's a lot to come.

www.carbonbrief.org/analysis-record-low-price-for-uk-offshore-wind-is-four-times-cheaper-than-gas/

About a year ago, I read about a project to build solar in morocco and send the electricity to the UK. They wanted the government to give them a price of 5p to make it viable. I guess it must look viable now. (Just googled, looks like that project is going ahead, the price will be 4.8p.)

octopus.energy/press/octopus-energy-backs-mega-solar-farm-in-morocco-to-power-7-million-heat-pumps-with-cheap-green-power/

acrimoniousone · 22/08/2022 14:30

Going off topic, but if you have a person with incontinence our water company (southern) literally cap your water rate - even if you're on a meter ... maybe useful for you if you didn't know this already?

Water: In case it's helpful to someone many water companies offer a 'social tariff' for the most fiscally challenged. You do not have to be on benefits, just have a household income below £17k. When I moved into my flat a few years ago the rates were £32pcm, a water meter took this down to £20ish and with the social tariff it's about £6pcm. The initial 60% discount is revised to 40% in year two of a two year contract but it's still a big discount. That's with Cambridge Water on their Assure tariff but Anglian Water for example have several schemes including support for high use/low income households. Google your water supplier and 'discounted tariff' to find theirs. The stated criteria (for Cambridge Water) are as follows:

Low household income

If your household income is less than £17,005* per year, you may qualify for a discount on your water charge. If you are eligible and your application is successful, your charges will be discounted for two years, in the first year by 60% and the second year by 40%.

If you have a dependent child living at your address, an additional allowance of £1,500 per child may be added to the household income threshold amount of £17,005* per year.

Non means tested benefits such as PiP and DLA are not counted as income.

Electricity and gas: The Warm Home Discount is being expanded this year - at present only Pension Credit automatically enrolls you but again anyone can apply and means tested benefits are pretty much guaranteed acceptance. £140 is a drop in the ocean right now though unless you live alone, hopefully it goes up a bit this year with current inflation in mind but not holding my breath. Increased standing charges are especially unfair on very low usage households, my bill is doubling before I use anything and there are no social tariffs for power.

Broadband and home phone: For broadband and internet again most big suppliers now have a social tariff but after investigating it myself it wasn't worth it, BT magnanimously supply 36mb/s for £20 when I negotiated 350mb/s for £22 with Virgin.

Sky and Virgin: The best advice I can give based on many experiences with Sky/Virgin is to fully cancel at the end of your contract. As in cut the service off. Politely advise the customer advisor that you don't wish to discuss it and just want to cancel. The initial discount they will offer will be crap unless you do this. Every time I have done this I have received a call from the 'loyalty' team within two days. They are the ones with the power to give big discounts, the standard rate for my broadband is twice what I now pay. I also snagged a decent phone contract for £2. Negotiate, especially now. There is nothing to lose and much to gain, you can still cancel the cancellation for a month.

Something which really winds me up is the way both Virgin and Sky offer the ability to do everything online except cancelling. I wasted three hours on 'live' chat trying to cancel Virgin before having to ring them anyway. Then it was a protracted sales pitch asking exactly how I use my services etc which only ended when I politely asked the agent to skip to the end.

They have to stick to the script otherwise in the hope people will get bored and give up. It's a shitty policy. My friend has been trying to cancel their Sky for weeks but keeps getting fed up with literal hours on the phone and puts it off another day. Their Sky contract (TV and broadband) has increased from £45 to £80 overnight and all Sky are offering on standard renewal is a tenner off.

Sky switched to something called a wide range LNB dish for the Sky Q rollout, up until recently this locked you into Sky unless capable of modifying the dish. Freesat now offer a box which records four channels at once and works with a wideband LNB. In the case of my friend it pays for itself in just five months and they will never have to pay for TV again outside of the license fee. Plenty of HD channels too!

Sky still charging £8 for 1080p HD in 2022 is a fucking pisstake when Disney is streaming in Dolby Vision/HDR10+ 2160p 4k for a penny less. I will never use Sky again after dumping them years ago and saving a fortune in the process. Terrible value for money and the worst customer service I've experienced. Standard definition channels are near unwatchable on a modern TV. Virgin are great as long as you know 'the game' upon renewal, the loyalty agents freely admit this.

Sorry for such a long post with so much detail but a) I'm autistic and b) I've got pretty good at being poor and want to share anything useful I can. I wouldn't have any streaming services if not for account sharing and don't have a TV license. With the ever increasing numbers of streaming services a lot of people have returned to piracy for their entertainment needs which doesn't help anybody.

Terminator66 · 22/08/2022 14:49

If the person is on minimum wage, 37 hours per week, just over £18,000 per year before tax & NI and they use the average usage stated in working out the price cap and the average usage is £6000 per year that would be over 30% of their income.

IMHO I think loads of people are going to be looking at cutting back by turning off everything they used to leave in standby mode and lowering the boiler and thermostat temperatures to 50 degrees, water and 55 degrees heating and lowering the thermostat to 18 degrees or lower.
I started turning everything off in standby mode, except the fridge, freezer and router last September, the gas wasn't such a big cut as I hardly used any.

I could see the average usage figures going down as those using less will see the average usage totals drop, I'm thinking it could drop to 2700 kWh electric and 9000 kWh gas. The downside is that the companies would make less profit so would want the kWh prices to increase as well as SC's so they keep the same total profit margin.

SpinCityBlues · 22/08/2022 14:53

Thanks for that helpful post, @acrimoniousone

Re: The Warm Home Discount is being expanded this year

Octopus are saying the scheme is closed for this year, and that details of 2022/2023 are yet to be released. Because it's 'first come first served' I imagine a lot of eligible people in the 'broader group' will miss out if they're not fast out the traps, including disabled people in their 60s on PIP and lower incomes (from what I've just read).

abcdeg · 22/08/2022 14:55

So, what's the plan? Quit your job, wait it out for weeks on end till UC kicks in and put yourself and your kids at the mercy of the Tory party who, let's face it, aren't renowned for their benevolent treatment of the poor?

If you're in a low paid job, maybe. It's not bankers who are going to quitting their jobs, but those on minimum wage might

ShesNotTheMessiah · 22/08/2022 15:22

I see Cornwall Insights have updated their predictions more in line with the £6000 figure.

Oct 22 - Dec 22: £3554 (80% rise on today's prices)
Jan 23 - Mar 23: £4650 (31% rise on previous)
Apr 23 - Jun 23: £5816 (25% rise on previous)

That means for every £100 we pay now, we'll pay £294.75 in April next year, should these predictions come to pass.

That's horrific.

Dadaya · 22/08/2022 15:51

abcdeg · 22/08/2022 14:55

So, what's the plan? Quit your job, wait it out for weeks on end till UC kicks in and put yourself and your kids at the mercy of the Tory party who, let's face it, aren't renowned for their benevolent treatment of the poor?

If you're in a low paid job, maybe. It's not bankers who are going to quitting their jobs, but those on minimum wage might

It’s been happening for years. Low waged people have difficulty working because the costs outweigh their salary.

How many mums have complained that they can’t afford to work because they’re worse off? Because childcare, transport and clothes add up to more than their salary after tax. How many people stay on benefits long term because the costs of working would exceed the amount they’d earn? Because they’d have to pay rent, council tax, prescriptions, and possibly student loan and child maintenance too. How many people purposely work less than 16 hours to retain their entitlement to benefits?

If energy prices go sky high and the government offers support to people on benefits, I can foresee some low waged people quitting their jobs so they qualify for support.

acrimoniousone · 22/08/2022 15:53

Octopus are saying the scheme is closed for this year, and that details of 2022/2023 are yet to be released. Because it's 'first come first served' I imagine a lot of eligible people in the 'broader group' will miss out if they're not fast out the traps, including disabled people in their 60s on PIP and lower incomes (from what I've just read).

The 'scheme closed' is normal, the application form usually pops up around October/November and EON always let me know as I'm on the priority service list. As a rule if you got it last year it's fairly solid you will get it again unless circumstances change.

Expanding the scheme is government policy but that doesn't mean much these days and it's only an extra tenner.

PuzzledObserver · 22/08/2022 15:59

@ShesNotTheMessiah do Cornwall Insight give the unit prices behind those headline figures? If so, can you link to them, please?

I have got our energy usage and costs pretty well nailed down. But I have been worrying more and more about my mum’s situation, and finally broached the subject with her today. I was mightily relieved to discover that she is on a fixed rate until the end of January and is currently paying a LOT less than the price cap. However, based on recent predictions, if she rolls on to the price cap at the end of her fix, her electricity will go up at least 4 times and gas 7 times.

Despite living alone in an average 3-bed semi, her usage is above the figures that the price cap is based on. At least we’ve got a few months to find ways of cutting down her usage and building up some credit/savings.

acrimoniousone · 22/08/2022 16:15

Regarding 'quitting your job and going on benefits' it doesn't really work like that -if you have intentionally quit your job without 'good reason' you will be at potentially sanctioned for three months and then face the joys of 'seeking work' for 35hrs each week and evidencing the fact unless medically unfit - that in itself is a nightmare to be honest and very difficult to navigate if unwell. Plus the five week wait (to help the poors manage their money like 'taxpayers') for UC forcing claimants into a government loan with punishing repayments.

I'm struggling to source it but it appears that radically decreasing one's hours is a way around both this and the benefit cap, actively encouraged by the current system.

The benefits system is extremely unwelcoming to new claimants and it's a lifetime of jumping through hoops and dreading the arrival of a brown envelope. It's not fun and I find the jealousy from much better off people who feel they should dictate what the poor do 'cos my taxes' really distasteful.

I paid plenty of tax before becoming ill.

PerfectlyPreservedQuagaarWarrior · 22/08/2022 16:16

Dadaya · 22/08/2022 15:51

It’s been happening for years. Low waged people have difficulty working because the costs outweigh their salary.

How many mums have complained that they can’t afford to work because they’re worse off? Because childcare, transport and clothes add up to more than their salary after tax. How many people stay on benefits long term because the costs of working would exceed the amount they’d earn? Because they’d have to pay rent, council tax, prescriptions, and possibly student loan and child maintenance too. How many people purposely work less than 16 hours to retain their entitlement to benefits?

If energy prices go sky high and the government offers support to people on benefits, I can foresee some low waged people quitting their jobs so they qualify for support.

To add to this, childcare and many forms of transport to a workplace are both going to become significantly more expensive. That's likely to price even more lower earning parents, disproportionately women, out of jobs.

I know the argument about it being a shared expense is beloved on MN, and there are times when it's applicable and useful. But as childcare costs soar due to energy bills, the number of families where the lower earner is going to cost more than they'll bring in and where that cost simply can't be borne is liable to increase too. And of course people are going to have to make the decisions they can best afford.

Unforgettablefire · 22/08/2022 16:28

Neverendingdust · 22/08/2022 09:56

If this happens it’s going to take away a chunk of disposable income for those of us who are comfortable at the moment. For those barely getting by to begin with its going to be utterly devastating and the choices they will face won’t be frivolous cost cutting- instead it will be do we eat or heat.

That's already the case for some people. People going to food banks are turning down certain foods because they can't cook them 😔

Ohdearthatwasntgreatwasit · 22/08/2022 16:43

BarbaraofSeville · 22/08/2022 09:57

The cap is set based on the wholesale price, plus costs and a limited amount of profit. It's the wholesale price that has increased, hence the increase in the price cap.

You do realise that the energy companies also set the wholesale price though?

Thats the whole problem.

daisychain01 · 22/08/2022 16:45

abcdeg · 22/08/2022 14:55

So, what's the plan? Quit your job, wait it out for weeks on end till UC kicks in and put yourself and your kids at the mercy of the Tory party who, let's face it, aren't renowned for their benevolent treatment of the poor?

If you're in a low paid job, maybe. It's not bankers who are going to quitting their jobs, but those on minimum wage might

The forgotten people are those in the middle category earner, who aren't low paid workers, but have to date been 'comfortable' and able to weather the storm. I count my family in that category.

Those people won't get the help as those on benefits and on NMW, but they will be in the mire, just to a lesser extent. In other words, it's going to hit a shit-load more families than in previous times (eg the austerity era).

it's very faulty thinking of people to think of "giving up their full time job, go PT and top up on benefits" - that's just about the worst thing you can do. Cling onto your FT job, get through things as best you can, companies need good people in this crisis, don't relinquish your job in the hope that the grass is greener. Oh no it isn't it's just about as brown and crispy as my lawn after the recent heatwave. Job stability is crucial so don't rock the boat!

Hospitality, fashion and beauty sectors won't go away, the best of the best will contract/shrink, but if they have a strong brand, service and product, they will weather the storm. People need a boost in hard times. They may not be able to buy to the same extent, but there will be demand albeit expectations in those markets will be set lower than in the boom times.

btw - if anyone has been in the military, or who's parents, family or friends have been past or present serving military, there is help at hand via SSAFA towards energy bills and food. You just need to contact your local SSAFA branch and they start the process for you / your relatives. The eligible person will need to provide verification of service which is easily obtained from their military unit. It's means tested but worth getting.

Cheeselog · 22/08/2022 16:46

Ohdearthatwasntgreatwasit · 22/08/2022 16:43

You do realise that the energy companies also set the wholesale price though?

Thats the whole problem.

The market sets the price. And the energy companies are not the only ones trading in it. There are lots of commodities trading firms out there. Some individuals even do it.

FourTeaFallOut · 22/08/2022 16:47

Energy producers set the wholesale price, well - the market set the price in relation to demand, energy companies buy therms from the producers and sell to business and domestic customers.

ShesNotTheMessiah · 22/08/2022 16:59

@PuzzledObserver No prices per unit, yet, and they do vary slightly by region so it's hard to predict specifically for you.

However, if it helps - I am estimating them to be approx. as follows in Jan 23

Elect
Standing charge: £1.05 per day
Per KWH: 65.17p

Gas
Standing charge: 64.21p per day
Per kwh 21.48p

That's taking my current rates (I am on the variable capped rate) and then applying the 82% growth for Oct and then the 31% for Jan.

As others have said, the standing charge may not go up quite as much as the cost per kwh, because there are no more bust energy firms to absorb the customers from, at a loss. So there may be a pleasant (not so awful) surprise specifically on standing charges.

forinborin · 22/08/2022 17:03

Well, all the recent scary projections are from tiny consultancies who are very keen to get their name mentioned in the news and distributed via search engines to increase relevance. If they are right, they will be praised as prophets, if they are wrong, no one will even remember them - and there's some super careful language around the forecast too.

They seem to be really reluctant to release any scenario analysis behind the headline numbers as well.

I would not panic as yet. The central projection is already not very pleasant, but there's no need to react to every apocalyptic sounding beep out there.

PuzzledObserver · 22/08/2022 17:15

@ShesNotTheMessiah Expletive expletive - that's even worse than I though!!!!

FWIW I don't think standing charges will be going up this time.

I've started to do some sums on my mum's usage based on applying the % increase to the strongest unit price predictions for October. She has been cutting her usage (and I'm going to help her get it down further) but even so, back of the envelope says she will be paying £700/month from April.

God help us.

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