No Travelling, Always In-doors and Colder Weather; Equalling Skyrocketing Energy Bills
With the UK effectively in self isolation and lockdown, energy bills will be soaring for many. On February 5th Ofgem announced that 15 million households will see their energy bill increase when the energy price cap for those on default tariffs and prepayment meters increases by £96 and £87 respectively.
In May 2020, Parliament estimated that energy bills would naturally increase due to lockdown measures by about an average of £32 per month due to increased energy usage during lockdown:
“That this House is deeply concerned with the increasing financial pressures being felt by struggling families as a result of the coronavirus; recognises that energy bills are estimated to increase by an average of £32 a month or almost £400 a year due to increased energy usage during lockdown”Household energy bills during lockdown (via parliament.uk)
Since measures were introduced off the back of the global coronavirus pandemic, energy bills will have increased by hundreds of pounds (relative to usage) by the time Ofgem have raised its energy price cap from the 1st of April this year by almost £100. It gets worse, as you’ll read below, as it is likely that energy usage will increase further as the weather gets a lot colder.
Martin Lewis of Money Saving Expert, also explains the deal with the energy price caps increasing in this video via YouTube:
Usage increasing due to cold weather conditions
Bills will have skyrocketed too as people spend more time at home, unable to leave for few reasons that are essential only. Let’s not also forget, and who could, the weather in the UK is not getting warmer right now and is seeing record breaking numbers, with The Guardian reporting 2 days ago that:
UK weather: temperature hits lowest level since 1995 after ‘extreme freeze’
The Met Office said the temperature in Braemar, the Aberdeenshire town famed for its Highland games, reached -23C (-9.2F), the coldest recorded in the UK since 30 December 1995 and the first time in a decade the mercury has dropped below -20C.
For the most part, Brits haven’t been travelling as per new laws introduced which make it illegal to do so and any travel insurance policy will likely be invalidated if you decide to travel, so you’ll be void of making any claims.
There’s no escaping the cold weather unfortunately, but those that would have travelled are saving on travel costs. However, let’s not get too ahead of ourselves, the economy last year suffered and contracted by -9.9% as lockdown restrictions kicked in and closed many parts of the economy which has resulted in an increased unemployment rate of 4.9%.
So how many people are actually able to afford a holiday is likely at its lowest point as consumers are squeezed of their financials. It’s however very clear from the government right now that travel should not take place:
It is illegal to travel abroad for holidays and other leisure purposes.via gov.uk
Hence, energy bills will be really only going in one direction and that is in an upward direction.
Searches on Google
Consumers, after the end of last year, are also feeling the pinch, and searches conducted on Google for the top 40 search terms are showing a significant increase year over year by +28% in January, and +92.67% so far in February when comparing like-for-like periods in the month:
|Date – Month
These will include terms like [energy switching], [energy comparison], [compare energy] and more.
To explain the February figures, there was a considerable spike in search volume which can be directly correlated to the energy price cap announcement which has spurred consumers to switch energy providers – hence why volume is generally up by a considerable percentage versus last year, and the MoM YoY figure vs January.
With the weather making it hard to keep the heating off — there are savings to be made by switching energy companies. Our partner of choice, Energy Helpline states that consumers are able to save up to £497 per year on their bills by simply switching to a better deal –
Personally, I’ve been able to make some savings from switching at the end of December already where I’ve projected savings of about £30 per month from switching from British Gas to goto.energy – potentially making a saving of around £360 this year.