Do you have money to spend on your energy bills?
Wealthy families are in the throes of a recruitment crisis, and they are said to be lying in wait for their neighbors to secure the services of housekeepers, nannies and gardeners. But the latest home help that turns out too hot to trot? Chimney sweeps.
As wholesale energy prices skyrocket, the whole country is preparing their homes faster than you can tell Dick Van Dyke.
Hetas, an exciting-sounding organization that endorses solid fuel-burning heaters, says searches of its website for chimney sweeps have increased 13% year-over-year, while demand for maintenance on wood stoves climbed 28%.
One of my city contacts who retired to the country was quite enjoying his new hobby of chopping logs until they became harder to find and prices skyrocketed. He speaks enviously of neighbors who have enough land to cut and dry their own wood.
And even city dwellers are burning their way to cheaper energy bills. Last week, Brighton and Hove council warned residents not to use ‘harmful’ wood stoves or open fires, citing the health implications of breathing sooty air, which hardly matches on the green agenda.
Respiratory health is of course a serious issue, as is fuel poverty.
Regardless of the size of the house you need to heat, by next April the average bill will be 60% higher than it was a year ago.
The lights off at Bulb this week signal some pretty electrifying changes for all of us going forward.
The bankruptcy of the UK’s seventh largest energy company is a good time. More than 20 small suppliers have retreated since August, but the emergency measures used to mop up the 2 million customers they collectively left behind cannot be applied to Bulb’s 1.7 million customers, of whom I be part of it.
Its size precludes finding a âsupplier of last resortâ that can absorb Bulb’s customers, which is why a new, untested âspecial administrationâ process has started. This is because the government is subscribing to Bulb until a buyer can be found – a process some energy analysts believe could take a year or more as wholesale electricity prices remain volatile.
The cost of this and other outages is expected to run into billions of pounds and will ultimately result in higher levies on electricity bills in the future.
But for now, what should Bulb customers like me do? The short answer is nothing. Our supply will not be interrupted, our credit is protected and the withdrawals remain unchanged. Bulb’s website continues to operate, so I took a screenshot of my balance and submitted a meter reading to feel better.
For now, energy price caps remain the cheapest offer on the market. The government is guaranteeing the cap will remain at its current level until next April, and it has just increased to Â£ 1,277 per year on average bi-fuel. However, energy analysts are already speculating that the cap level will reach Â£ 1,800 by then. Equivalent to Â£ 150 per month, that would be 60% higher than the April 2021 cap level.
The data used to calculate the level of the cap is retrospective and only updated every six months, so the full strength of the spike in wholesale gas prices has yet to be reflected in consumers’ bills. .
In an email to customers this week, Bulb criticized the price cap for bypassing its business. It is currently pegged at around 70p per therm, but electricity prices have hit nearly Â£ 4 per therm, up from 50p a year ago. Closing the gap has resulted in a loss of around Â£ 700 per household, which Bulb lenders and investors are no longer prepared to fill.
Ofgem is now consulting on emergency rules for adjusting the cap more frequently (hopefully this would apply to steep price drops as well, if we ever see any!)
This creates considerable uncertainty for consumers, who may naturally be tempted to ‘lock in’ to a fixed price deal. However, those who do will be immediately charged around 30% more than the current cap level, plus an ‘exit fee’ of up to Â£ 100 if prices drop and you want to break the contract and opt out.
My budget can handle the coming hike, but millions of people are expected to struggle this winter – especially those surviving on state benefits and pensions who are already battling rising inflation.
Higher bills will also strain the budgets of âasset-rich but money-poorâ retirees living in large, drafty houses.
And, as many of my friends and social media followers are finding out, the process of switching to a new provider after yours goes pop can be a lot more expensive than you might think.
When the new provider takes over, any “fixed rate” deal you had previously will be forfeited. The lowest tariff is the energy price cap, but even that could be considerably higher than what you were paying before.
And while Ofgem guarantees that any credit you have accumulated with the previous provider will be protected, many of you are reporting that it takes months for this to be credited to your new accounts.
After the summer lull, most people’s credit balances are high as winter approaches, a period of much higher energy consumption. Not having this “buffer” means that the monthly withdrawals suggested by new suppliers are often much higher than expected.
Also, a lot of my followers say their picks haven’t been taken for months during the switch process. When systems eventually catch up, it could leave those who haven’t put money aside facing a hefty bill.
Meanwhile, many people are left unprotected by the price cap, including small businesses and around 1.5 million households that use heating oil.
They tend to live in rural areas where the cost of connecting homes to the gas network is prohibitive. The cost of heating oil has risen 25 percent since September – rural MPs say finding the cash up front to fund winter deliveries is a huge problem for their constituents.
Oil users are not eligible for the Warmer Homes rebate, worth Â£ 140 per year for those on lower incomes.
Even for electricity and gas consumers, the rebate is not all it should be – it has not kept pace with inflation and arguably needs to rise in line with the price cap. Those whose suppliers have gone bankrupt must reapply through their new supplier, and because this is a âfirst come, first servedâ system, there is no guarantee of success.
If there is one thing that is truly worth tearing up and throwing in the fire this winter, it is the obsolete and inflexible system that is being used to help people pay their energy bills during tough times.