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Soaring energy costs: How to prepare for bleak winter for personal finances ahead

by LLB Reporter
26th Aug 22 8:27 am

Ofgem  today raised the energy price cap to £3,549 from 1 October. This represents a rise of 80%, or £1,578 increase on the current price cap of £1,971.

Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, said, “The dizzying rise in the energy price cap from 1 October is set to be a real-life nightmare before Christmas for consumers.

“The new cap level means the typical household is set to pay almost £2,300 more on their annual energy bills than they did in October last year when the cap was set at £1,277. However, consumers will pay more or less than the headline energy price cap figure depending on how big and energy efficient their home is.

“No one is immune from the stratospheric rise in energy bills, but they are having a disproportionate impact on poorer families. We have already seen energy or eat dilemmas play out during the warmer summer months when the heating doesn’t come on often – if at all.

Preparing for bleak winter for personal finances ahead

Jobson said, “With households set to be hit with bigger energy bills this winter, it is worth thinking ahead – despite the current warm weather. Any savings you can make now, while the heating is still off, will help you build up reserves for winter when you’ll really need it most. But that’s easier said than done in a cost-of-living crisis.

“Rather than making swingeing cuts to few areas of energy usage, making smaller cuts to across a broader range of energy consumption could be a more palatable way of cutting costs, but it is such a personal decision and it’s always easier said than done. Small changes can have a big impact on your energy bill. Avoiding excessive energy consumption is good for your wallet, but also good for the environment.

“However, many people have already cut energy use to the bare minimum and the elevated energy price cap rise is set to push more and more people into fuel poverty. If you’re behind on your bills, contact your energy provider to ask for support. It is worth consulting a debt advice charity such as StepChange or Turn2Us and they will go through all of your options.”

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