The cost of energy has been on a dramatic upward trajectory over the last year or so, with consequences that have been felt across the broader economy.
The government saw fit to intervene to get the UK through the winter, with a lower energy cap to replace the one set by Ofgem.
In April, however, this cap is set to relax slightly, such that the average household will be spending £3,000 rather than £2,500 per year.
What’s driving the increase?
A range of factors have contributed to the increase in prices.
The most obvious is the war in Ukraine, and the resulting sanctions that have been piled on Russian gas exports.
Since the overall supply of energy has been constricted, the price of the natural gas and oil that remains has been driven up.
Gas is used to produce electricity in the UK, with around a third of our electrical power coming from burning natural gas.
The amount of gas the UK has in storage will influence the price that homeowners pay for their energy.
The same goes for the strength of the pound, and even for the weather. While wholesale energy prices have actually fallen recently, this will take time to influence the amount we all pay.
What can you do?
There are several practical measures that homeowners might take to protect themselves.
The bigger your cash reserves, the better – though you should be aware that the value of your savings might be impacted by inflation.
Make sure that you use a savings account with a favourable interest rate.
You might also invest in a few key appliances to reduce your energy consumption. Solar panel installation can make you more self-sufficient, and the investment is relatively modest.
The same goes for air-source heat pumps and other measures. If you’re considering this, then be sure to look into government support.
More obviously, it’s a good idea to use as little energy as you can. Avoid putting the heating on; wrap up warm instead.
Invest in insulation for the loft, and for other areas of the house, too.
A simple foam strip around a draughty door can cost just a few pounds, and end up saving you big.
If you’re submitting meter readings, do so regularly. This will help your energy provider to avoid overcharging you.
You might also switch energy providers if you decide that the deal you’re on currently isn’t worth it.
If you have a smart meter, then you’ll be able to see exactly how much you’re spending in real time.
This will not only help you plan for your bills – it’ll also provide you with an incentive to change your energy-consuming habits!
(pic free to use https://www.publicdomainpictures.net/)
Recent Comments