The Cost-of-Living Crisis – What the Autumn Statement Means for Your Energy Bills
Regardless of your level of income, one thing now unites the nation and that is the soaring costs of our utility bills.
With the disproportionate rise in our heating and domestic utility bills, millions around the country are struggling to not only heat their homes but the unprecedented peak in energy prices has also stripped much of the disposable income that we once enjoyed.
The Chancellor announced several measures to tackle the soaring cost of living in his recent statement and this article will assess what this means for you and your loved ones as well as some analysis as to how we got here and what the future may hold.
Rising Energy Prices – A Global Phenomena
Regardless of your view as to where we source our energy, one thing is abundantly clear – the world has a deep & interconnected dependency on natural gas and energy products.
Despite enjoying ample supplies of natural gas to power our homes and businesses, successive governments have failed to invest in the strategic decisions needed to ensure that the UK has a sustainable and as clean as possible supply of natural gas. The UK is as such incapable of meeting its domestic energy demand and relies heavily upon expensive power interconnectors with our European neighbours and relies even more on expensive & sought after Liquified Natural Gas (LNG) deliveries from North Africa, Norway, the USA and Middle East.
The war in Ukraine has disrupted not only global markets but has had a major impact on European energy feedstocks – without a dependable but politically unstable mix of Russian pipeline gas, our European partners are now scrambling for finite supplies of expensive LNG to overcome their traditional supplies. Coupled with the UK’s inability to build gas storage, uncouple wholesale gas pricing from power production and develop a fleet of replacement nuclear power stations, the UK is disproportionately exposed to international energy uncertainties.
So, whilst the global energy price markers have risen for much of the world (excluding major energy producers), the UK has found itself at the mercy of international markets.
Measures Announced to Soften the Energy Crisis
This crisis could mark the point by which energy policy is taken seriously by future governments and as such we may see a rise in domestic production and storage ability, which would quickly lower bills across the country.
For this to happen we would need to see stable, non-short-termist governments take long term strategic decisions – There may be a cause for optimism should this happen but for now the Treasury have announced the following measures to help soften the blow of the energy crisis:
- The household energy price cap will be extended for one year beyond April of 2023; however, the levels will be less generous with energy bills capped at £3000 as opposed to £2500
- Means assessed households on benefits will receive £900 in support payments next year
- Pensioner households will receive £300 and individuals on disability benefits will receive £150
- Windfall tax on profits of oil and gas firms have increased from 25% to 35% and will be extended until March 2028
- A new 45% tax on companies that generate electricity will apply from January
Few are expecting the crisis to end at any time soon but at this exact point we can expect a little relief from government – the reality however is that bills will increase until we find a point by which the UK can shield itself from the vagaries of international market forces.
Fintuity – Your Financial Partner in a Time of Crisis
Information is key to overcoming a crisis and Fintuity can assist you in a number of ways by helping you plan for your financial future.
As the cost-of-living crisis continues to increase, we can assist you in a number of ways including a cutting-edge Virtual Adviser, a library of up-to-date financial advice, a complimentary IFA meeting as well as a searchable blog with hundreds of articles and a complimentary financial health check to allow you to maximise your finances. The Fintuity team can help supporting you with advice on:
- General financial and budgeting advice
- Cost of living workshops
The best place to start however is with a financial health check to allow us to work out how best to help you. Knowledge is power – receive your complimentary financial report with our Virtual Adviser or Book your Initial Consultation today to speak to a member of our team.
Introducing Fintuity – The UK’s Digital IFA!
Fintuity is like a traditional IFA, only we are an online adviser which means we can offer a more cost effective, time-sensitive and flexible service! We offer the full range of IFA services via our digital platform, at below industry rates and at your convenience. Please do not hesitate to get in touch to see how we can help you.
Please Note: All information included in this article were correct at the time of publishing.