What the F: Energy prices in UK set to spike

Our brand new What the F(inance) series is a space for older people to share their views on money news that matters to them.

The series will be exploring a variety of current affairs, ongoing issues and different opinions that affect you financially, all commented on or written by local people. 

It used to be that loyalty was rewarded, however, over recent years the energy suppliers have turned that concept on its head; the longer you stayed with a supplier the more they surreptitiously increased the price.

Attractive tariffs became the preserve of new customers, hence the emergence of ‘money saving experts’ and a slew ‘switching’ companies including USWITCH. Go Compare, Switchcraft etc., who encourage you to change supplier annually to obtain the best prices.

I stayed faithful to British Gas for many years before succumbing to a ‘switcher’ who set me up initially with another ‘big six’ supplier at an advantageous tariff. The premise of the ‘switchers’ though is that year on year, they will get you a saving on the cost of your energy.

This seems to me a rule of diminishing returns as eventually, you must run out of even-cheaper supply. Sure enough last year I was switched to a people’s co-operative, whose first email after they’d set me up as a customer was to inform me that their head office had suffered a data security breach!

The monthly amount offered was truly attractive but, unfortunately, after the first month was hiked up by 14% and I had the unprecedented burden of feeding in meter readings for both gas and electricity every month.

I suffered in silence realising that I could switch supplier in a few months time and would then insist on a big six supplier, even if at a premium. Things came to a head when I was scanning my paper to read that my supplier had collapsed due to the huge spike in wholesale gas prices.

I was aghast and never having been in this situation previously, I avoided using a switch company and instead directly arranged to transfer to British Gas the next day, on their variable rate over two years but at a premium of 25% on my existing deal.

I figure that ease and security of supply must take precedence.

It is now a worrying time, especially for vulnerable pensioners, as the energy market is beset by a perfect storm: clement weather has meant that green wind power has been stunted; Russia has curtailed European supplies as geopolitics play out, and a vital undersea supply line has ruptured and cannot be fixed until March at the earliest.

Hence not only hikes in domestic gas and electricity, but also probable food price spikes and limited supply as carbon dioxide, needed in food processes, will be in critically short supply, in part due to Brexit as crops rot unharvested in the fields.

Never has the choice between food or heating poverty seemed such a stark possibility as the autumn closes in and pensioners juggle their financial resources to try to keep both warm and fed.

Is there anything the government can do to mitigate these Black Swan events? Already special loans are being mooted to prop up some of the energy suppliers of whom it is expected that from a peak of 70, only about ten will survive.

The energy prices contain hidden taxes to help achieve climate goals…so can these green taxes be suspended perhaps?

Or maybe the proposed easing of the pensions triple lock may have be rethought, certainly until this crisis is behind us.

What do you think? Leave us a comment or send your thoughts to [email protected]

1 COMMENT

  1. I’ve continued to avoid the “switch” culture. I did once change my telephone provider many years ago because Clive James had seduced me with promises of the “Internet Superhighway” and cable telephone / T.V. was more than I could resist. I vaguely remember switching mobile phone suppliers once and insurance companies once or possibly twice but not, incidentally, banks. Oh I nearly forgot we did change window cleaners a few years back and I guess, if I’m honest, we’re not with our original doctors, dentists and vets from 50 years ago. It probably hasn’t made economic sense for me (up until now at least) to not keep changing gas and electric suppliers but somehow I couldn’t work out what real value is actually added to the fuel that I buy by indirectly paying people to create gimmicky (no doubt expensive) adverts with accident-prone opera singers and cute talking animals, especially when parents were being forced by their children to obtain cuddly replicas of said small mongooses (I thought it was “mongeese” but apparently not). It also occurred to me that there are companies who manufacture gas and electricity and possibly also provide us with maintenance services when required but my suspicions are that many of the smaller companies can’t have the infrastructure to do that sort of thing, so presumably they just buy the product and resell it. I can’t even begin to understand the relationship between the people who own the pipes and cables with the people who feed the fuels into them and the ones who send us the bills. The idea of messing about to save a bit of money, always seemed a bit inappropriate to me but I guess the market is designed to appeal to either those who are genuinely struggling to make ends meet or to those who are always looking out to save a few bob by any means. Perhaps the bubble has now burst and I’m probably still paying more than I should. I can’t, however, feel a great deal of sympathy for the middle-men companies who don’t actually do appear do anything apart from juggle money and commodities about on their computers. For those of you customers who are adversely affected by it, it is a shame, especially if you are struggling, rather than cheap-skating but I’m only glad I continued to resist the temptations of this somewhat dubious market system and that I didn’t get my fingers burned too. Perhaps instead of our traditional General Elections, we should have an app that allows us to instantly change politicians and governments when we’re getting a bit miffed with them or their policies.

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