Some more positive news out of No.10 today with Prime Minister Liz Truss confirming energy bills will be capped (energy price cap) at £2500 per year for a typical household in the UK with the cost of living. This will continue for another two winters and should see millions of homes see a much better outlook than recently promised. A £400 energy rebate will also continue to be paid, relieving the pressure that little bit more.
Below are 13 points which can be taken from the recent positive news:
- A £2500 cap for a typical household will be guaranteed for two years in retaliation to the rising costs.
- Currently, the price cap is £1,971 a year for typical household use, and was due to rise to £3,549 a year (and likely £5,400 a year in January). It was £1,277 a year last winter.
- Standing charges and unit rates will be capped, so the more you use, the more you pay, and vice versa. There is no total cap on what you pay, unfortunately.
- Green levies will be removed as part of the new price cap.
- The £400 energy rebate will continue and provide a much-needed lift on top of the cap.
- An average payment of £2,100 a year will result from the £400 energy rebate in a typical home.
- To estimate what you’ll pay, over a year, multiply current costs by 6.5% (each £100 becomes £106.50). This includes the £400 discount (but not other payments).
- Customers whose usage is lower than the average household will see the % increase lower and for higher users higher (as the £400 payment is flat regardless of use, so has a bigger proportionate reduction on lower usage).
- People who receive benefits will still receive the £650 promise paid to them (half’s already been paid).
- Together with the £150 for those with disabilities and £300 for pensioners.
- Announcements have yet to be made on whether these payments will be in place next winter. It’s likely for people claiming benefits that this will continue next year, however, this is not confirmed.
- There is no reduction in VAT as of yet, but this may change.
- Oil and LPG users will have discretionary payments to help them.