Money-saving expert extraordinaire, Martin Lewis, has had a lot to say about the state of the energy crisis over the last year. A financial journalist and broadcaster, Martin’s goal is to help people save money wherever they can. 2022 welcomed utter chaos within the energy market, causing Martin to redirect his focus. Now, his mission is to advise people on how to navigate the crisis and save money bills – a venture more critical now than ever. From advice on how to keep warm without turning the heating on, to finding the cheapest Christmas dinner, Martin aims to bring light to the state of the energy market.
Early this year, we learned energy bills were set to double this winter. In a recent video, the expert took a detailed look at the real impact this crisis would have on our bills and lives in the coming year, outlining how high the price of wholesale gas has become and the significant impact on the price of electricity.
The sorry state of affairs keeps getting sorrier. With prices set to rise again in January, it’s important to know if and how this will affect you. If you’ve got any questions that haven’t been answered in this blog, reach out via www.vision2030.co.uk to find out more.
What’s the difference between the price cap and the price guarantee?
The idea of the Energy Price Guarantee is ultimately to keep the average bill for customers paying by direct debit at a steady £2,500 until March 2023.
According to Ofgem, the Energy Price Guarantee is a ‘temporary additional measure to protect consumers from the recent significant increases in wholesale gas prices.’ While the price cap ensures the ‘profit energy suppliers make is capped’.
The energy price cap is reviewed by the energy regulator, Ofgem, every three months. While this change isn’t quite as significant as the hikes we’ve seen in the past, you may suffer a slight change. As it stands, the price cap is set to rise 25% in January 2023, for the average household, up to a whopping £4,279 per year.
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How much will you pay?
This price applies to the average household consumption, paid by direct debit. The good news? Most billpayers will stay protected by the price guarantee.
While the change itself is relatively small, it is once again, the poorest in society that will feel the adverse effects of another price increase. The name loses its meaning when our prices are so far from ‘guaranteed’, and for many, this change will come as a shock.
The typical price for prepayment bills will rise from £2,559 up to £2,579, equating to a 0.8% increase in total. While customers who pay on receipt of the bill will be subjected to a 1.4% rise, moving from £2,715 to £2,754.
Martin the money-saving expert commented: “The energy price guarantee was meant to guarantee prices until the end of March (when we know the cost people pay will increase by 20%). So it will come as a surprise to many to see prices change in January.”
While Grant Shapps, the Secretary of State for Business, Energy and Industrial Strategy remarked that the rise is ‘marginal for most people’, the change is an ongoing indication of how unsteady the rise of energy bills has become.
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Whether your goal is to put a stop to fretting about ever-increasing energy prices, or reduce your carbon footprint for a greener, cleaner world, Vision2030 is here for you.