Soaring Energy Costs, Companies Going Bust and Winter's Coming!
It’s not often that gas and household bills are at the forefront of people’s minds, but they’re certainly a major talking point at the moment. The energy market has been flipped upside down in recent weeks and the crisis is set to continue for months to come.
Everyone knows that wholesale energy prices – the cost suppliers pay to buy energy – have risen to record levels. This has been compounded by the Government’s price cap – the upper limit at which energy suppliers can charge customers on variable tariffs – which has meant a number of UK suppliers are no longer able to operate sustainably. In fact, numerous companies have stopped trading altogether.
When wholesale energy prices rise it’s usually unwelcome news for customers as it means an increase in their energy bills – from 1st October for those on a Variable tariff, or when their current Fixed price tariff ends.
What is the Government’s energy price cap?
The energy ‘price cap’ is the upper limit at which energy suppliers can charge customers on Variable tariffs.
The price cap was introduced at the start of 2019 by the government. This resulted in “a fair price for energy” to make sure energy companies don’t charge their customers too much, but also that they’re able to cover their costs of buying energy.
The price cap is reviewed twice a year by Ofgem (the UK’s energy regulator) – in April and October. The price cap has, however, upset small energy providers because they’re unable to charge their customers more to cover the sharp rise in wholesale gas prices, and so they collapse.
Fixed and Variable Tariffs
If you began a fixed tariff earlier this year you’re in a good place for the time being. When your contract ends, however, your bills will rise significantly to be in line with the current situation. But getting on to another fixed rate is actually the most expensive option at the moment as there is a 25% premium added to fixed tariffs.
Unusually, variable tariffs (also known as standard) are the cheapest option. This is because of the price cap. Companies are not allowed to charge more than the price cap on standard variable tariffs. (Again, this is the reason why small companies who were undercharging customers with seemingly supercheap deals now can’t afford to pay the wholesalers and have gone bust).
When fixed tariffs come back down and are cheaper than variable, that’s the time to get on to a fixed deal. If you’re changing provider, you’ll find variable to be cheapest, then move to fixed later. If you’re transferred because your provider has gone bust, you’ll be put on standard variable.
I’m worried my provider will go/ has gone bust. What should I do?
The first thing is not to worry about your supply, you’ll still receive gas and electricity!
If your provider ceases trading you’ll be moved by Ofgem to a mainstream provider, without any choice and probably with significantly higher bills.
If you have not received notification of your new provider, you are free to choose where you move to. But act quickly!
If you have had notification of your new provider, wait for the switch to happen and then you’re free to move without penalty.
People are being led to believe there is no cheaper solution out there. Not true! (a certain well-known public figure doesn’t mention Utility Warehouse because they don’t pay him, even though he is well aware they are the cheapest at 5% below the price cap and always have been).
How I can help you with Utility Warehouse
UW is the UK’s only genuine multi-service provider for gas, electricity, landline, broadband, mobile and home insurance. UW is the provider – not a broker – they do not put you with another company. They’re the country’s best secret provider, I suppose; unknown by many because they don’t spend millions on advertising, instead choosing to grow through recommendation and referrals.
UW has been going for 25 years, and is a cash rich, well-established company unaffected by the energy crisis because, like the Big 6, they buy gas in advance and have a long term business plan, rather than ‘pay as you go’ smaller companies who are out for quick wins.
UW is not going bust! I can say this with real confidence for three key reasons:
- Firstly, the structure of their wholesale energy agreement means that the cost of the energy they buy is protected against pricing volatility, both today and in the future.
- Secondly, they’re more than just an energy provider. They have a unique multiservice offer that also spans broadband, mobile and insurance. This generates a number of different revenue streams and means they’re not solely reliant on energy.
- And finally, they’ve always taken a long-term approach to pricing while still offering competitive tariffs to all their customers. They’ve spent the last 25 years building a stable and sustainable business, and plan to be around for many years to come.
UW has always been consistently fair to all customers, never tempted to seduce newcomers with supercheap deals at the expense of existing customers. That is why now, with other companies panicking and shooting up prices, they remain calm and collected, helping thousands of families have peace of mind through this crisis and far into the future.
Despite not paying to be featured on comparison sites, UW come out top when you take a look at Citizen’s Advice here: https://energycompare.citizensadvice.org.uk/
For help and advice, or to see how UW can help you or someone you know, ask me for a call and we can take a look online. If you’re local to the West Midlands and would prefer a face to face appointment, that is also doable.
There is no need to be worried about the winter ahead if you’re with UW for your bills!
I’m delighted to be helping a lot of people and I’d invite anyone you know who’d like a free bill review to get in touch.