Why will mansion owners get over £20k gift in energy bill reductions when typical households get around £1.5k?

[Malthus123]

I am sorry but I just don't understand,

I've done some maths on it (happy to share if anyone wants) and the 2-year govt. energy price guarantee could result in around £12bn going to the 2.8m UK households earning over £91k per year. £4bn will go to the top 1% of energy users, this will include mansions with heated pools!

My energy bill is going through the roof, over 2m people had to use foodbanks last year. But at the same time, the wealthiest in the UK are getting unnecessary government-funded energy bill subsidies to top up their bank accounts???

£12bn could give £4,200 to each of the poorest 2.8m households, feeding kids and heating homes.

Am I living in some sort of dystopian fantasy world? How do we stop this!!

I do think that if they were going down the cap route, then it should have been for a certain amount of energy only. With different rules for those with disabilities.

Where are you getting your figures from, and what assumptions have you made?

The price of units of gas and electric are capped, so you still pay for what you use. Big house, pool, etc will pay more than small flat.
The average price quoted in the media is just an average price, not a cap, lots will pay more, some will pay less.
The wealthy are getting plenty of tax breaks from this government, but as far as I am aware, they are not getting any extra subsidies for energy bills.

I’m confused - how would owning a mansion get you 20 grand?

The price of units of gas and electric are capped, so you still pay for what you use.

Except you don’t. You pay a proportion of what you use, the government pays the remainder. So high users pay more but the government also pays more for their use too.

I agree, OP, it’s outrageous that there was no limit put on how many units each household can get at the subsidised rate.

Yeah, sorry, you are right of course. Big users do get a better deal.

I try to be quite mean with the heating but our house is on the larger side.

I had an email from my energy supplier yesterday saying that my annual bill should go down from £14,500 to £10,000. So a subsidy of around £4,500. That's on a variable rate as I couldn't face the premium to fix it.

Fuck! How big is your house!

Five bedrooms. Honestly I'm really mean with the heating, I wear a coat inside for most of the winter.

I had an email from my energy supplier yesterday saying that my annual bill should go down from £14,500 to £10,000. So a subsidy of around £4,500.

Whereas I’m actually careful with my energy use (£10,000 is more than my rent, no way I could afford that) and so I get a subsidy of £400 for the year. So those who are already better off get more help from the government than those who are middle income households.

Tbh I don't see why anyone is having to pay for this and previous governments' failure to protect the U.K. by investing in our own renewable energy supply.

It was an obvious disaster waiting to happen.

God your bills are astronomical! I have a drafty 4 bed and am expecting bills to be around £315 per month at the new October price cap.

@BigWoollyJumpers
Thanks for asking, I should warn you that I, like my kids, am autistic, and am a bit of a numbers nerd!

Subsidy based on household income has been calculated using Office of National Statistics data on average household energy use by household income, (Split into 10% bands each of 2.8m households by income). To this, I applied the government-stated tariff caps and expected average 2023 tariffs without the cap from Cornwall Insights data.

For subsidy based on household energy use (£4bn to the top 1% energy users), I calculated using the same tariff assumptions as above but used some data helpfully supplied to me by the Govt Dept of Energy Business and Industrial strategy following an FOI request. This shows how many households use how much energy, 225-250,000 households make the top consuming 1% using 3% of all gas and 5% of all electricity.

If you are really interested I can share spreadsheets :)) Joy! I did warned you ;)

This!

Define mansion? And how do you decide need? Someone housing 9 people who actually need the space? Or someone paying to heat a swimming pool, sauna etc.

Making sweeping generalisations is never a good idea.

£12bn going to the 2.8m UK households earning over £91k per year

Well for starters, 24% of households earn £100k plus, so way more than 2.8m households. There are 28m households in the UK, so 6.7m households.

I don't see why anyone is having to pay for this and previous governments' failure to protect the U.K. by investing in our own renewable energy supply.

Lots of reasons. Because the majority of people didn’t vote for parties who prioritise renewable energy or energy independence. Because most people didn’t want to pay upfront for building renewable (or nuclear) power stations. Because millions and millions of people thought “get Brexit done” was more important than anything.

We can’t just blame “the government” when the electorate keep voting them in!

Sorry, was looking at London % plus total UK %. Ignore.

I have the govts data in front of me on the spread of energy use across all UK households, and yours sounds really high. Your house must be electrically heated surely, or you would be in the top 1% of UK energy users.

NP. Have a look at the ONS data on household incomes UK if you like www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/expenditure/datasets/familyspendingworkbook1detailedexpenditureandtrends

OP I am sorry, I am not a data person so didn't understand you second post.

you're not assuming the cap is a cap on total price paid, are you?

I don’t think your base assumption is accurate op, that’s causing your numbers to be out.

After 13 years of Conservatives , it maybe a bit generous now to blame anything on previous governments.

Suppose I use 50 units a month. The price per unit is capped at £1, but the real cost is £2. My power costs £100. I pay £50, the government pays £50.

Meanwhile Lord Snooty uses 5000 units a month. The price per unit is capped at £1, but the real cost is £2. His power costs £10,000. He pays £5,000, the government pays £5,000.

The more I spend (or can afford to spend) the more I get

The energy cap by Truss has reduced the increase on a "typical" energy bill by £1000 a year.
Are you saying there are households who use 10 times the average bill. So 90,000kWh of gas a year, and 29,000kWh of electricity?

Well Thatcher had a choice in the late 80s(?) to invest in renewables and she chose not to