Energy cap and cost of living updates
What has been announced?
We have put together a round up of the announcements in an easy to digest format below:
- The domestic price cap will increase by £693 or 54% in April with another potential rise in October.
- The average household bill is now £1971 per annum.
- Prepayment customers see increases of £708 taking their annual bill to £2017.
- VAT on energy is NOT scrapped.
- OFGEM describe the current market as “a once in 30 year event”.
- Currently 18m households are on price cap tariffs.
- Rishi Sunak has announced every domestic electricity customer on supply with a domestic energy provider will receive a £200 discount from October.
- The exact method of this discount is not yet known.
- This is a loan and will be repaid in 5 instalments of £40 over the next 5 years.
Not Covered by the Price Cap
- No announcement has been made to include domestic users on commercial contracts in either the Price Cap or Energy Fund.
- We expect announcements and updates from BEIS, ADE, Heat Trust and other industry bodies.
- Households in England with a council tax band of A – D will receive a £150 discount on their Council Tax bill from April.
- The equivalent sums are being provided to devolved Governments.
- To identify the council tax band of any property you can use.
- Check your Council Tax band – GOV.UK (www.gov.uk).
- The Bank of England has increased interest rates for the second time in three months.
- The increase is from 0.25% to 0.5%.
- Interest rates are increased to make borrowing more expensive and saving more attractive.
- This is designed to reduce inflation as there is less demand for products.
- Inflation is forecast to be 6% for 2022 with wages not expected to match.