Energy in your pocket: Just a thought

According to Ofgem, the UK average dual fuel bill is £1,131 a year, that’s £94.35 a month, which equates to nearly 4% of the average UK household budget.
If you live alone or there’s only two of you in a one or two bed flat, then chances are your bills are going to be lower. UK Power estimates gas at £33 a month and £34 for electric (source)

2021 gas and electricity price rises

Since the introduction of Ofgem’s energy price cap in January 2019, most suppliers have based energy prices on their default tariffs on the rate of the price cap.

Following an increase in the price cap level announced in February 2021, suppliers raised their prices for customers on default tariffs.

All of the ‘big six’ energy suppliers announced price rises this year, each implementing an average £96 annual increase for customers on standard variable and default tariffs. These price rises came into effect from 1 April 2021.

(source)

The average UK household spends £2,548 a month on household bills—according to the average (and unlikely!) household size of 2.4 people. However this figure averages all households (including those with no rent or mortgage expenses)— housing costs would be lower for those owning a home outright and higher for those with a mortgage or renting, as you can see in the table and chart below (in green)

(source)

All the above has been copied/pasted from the sources linked and are for some background to my post.
We have known for years that we are below average in our expenditure and even when we were working, our household budget was way less than what is quoted here.
I feel I have lost touch with today’s monetary reality as quite honesty I find these figures scary. A lot of the above wouldn’t relate to us (sunglasses, alcohol, holidays, mortgage, eating out, household appliances, gym fees and the like) but our council tax is £126 pm, broadband /line rental £20 pm plus calls and VAT, water £30 pm, fuel for the car about £50 pm depending how often we use it and where we go, and food around £140 a month.

We are on a fixed tariff for our gas and electricity until the end of September, so naturally I have been looking around for comparison tariffs in plenty of time instead of leaving it to the last minute.
As per the above, UK power estimates £33 pm for gas and £34 pm for electricity for 2 people living in a one or two bedroom flat. Our property is a two bedroom detached bungalow, so OK all on one floor, but our energy payment of £46 pm covers gas AND electricity. However, we do not have a dishwasher, electric shower, tumble dryer or TVs (on standby or not), though I do cook on electric, have an automatic washing machine and a microwave.

I’ve had a bit of a shock today as although I had intended to increase our monthly payment to £50, it would seem that energy prices have gone up considerably more than that and from what we had seen, we could expect to pay around an extra £100 a year. Ouch.
However, looking at the potential figures for a fixed tariff, it seems that it is not the cost of the energy that is knocking up prices, but the daily service charges. Years ago the energy companies scrapped the quarterly service charge and cunningly incorporated it in the price hike. In recent years, the service charge has been reintroduced on a daily basis, and it is this that has seen a large increase.
Our current electricity is 17.08 p per Kwh, with a daily service charge of 15.82 p.
Gas is 4.03 per Kwh, with a daily service charge of 14.64 p.

Three alternatives quote
electricity 18.39 p per Kwh, daily charge 23.77 p, gas 3.55 p per Kwh, daily charge 26.60 p ,
electricity 18.49 p per Kwh, daily charge 23.78 p, gas 3.26 p per Kwh, daily charge 26.60 p,
the above fixed for 2 years, and this one for one year
electricity 18.49 p per Kwh, daily charge 22.13 p, gas 3.26 per Kwh, daily charge 24.96 p.

So in all instances above the gas rate per Kwh has reduced, but daily charges are up by between 10p and 12p.
Electricity is up around 1.30 p or 1.40 p per Kwh, and the daily charge between 6p and 8p.
Regardless of how much energy we use, we can add an average of 18p per day to our bill, which is £1.26 a week or £65.70 a year. Our electricity is stable at an average of 3 Kwh a day, but obviously because we have gas heating, that will be much higher in the winter.
What annoys me is that we can control our usage, but have no say on the calendar.

Just a thought.

About pensitivity101

I am a retired number cruncher with a vivid imagination and wacky sense of humour which extends to short stories and poetry. I love to cook and am a bit of a dog whisperer as I get on better with them than people sometimes! In November 2020, we lost our beloved Maggie who adopted us as a 7 week old pup in March 2005. We decided to have a photo put on canvas as we had for her predecessor Barney. We now have three pictures of our fur babies on the wall as we found a snapshot of Kizzy, my GSD when Hubby and I first met so had hers done too. On February 24th 2022 we were blessed to find Maya, a 13 week old GSD pup who has made her own place in our hearts. You can follow our training methods, photos and her growth in my blog posts. From 2014 to 2017 'Home' was a 41 foot narrow boat where we made strong friendships both on and off the water. We were close to nature enjoying swan and duck families for neighbours, and it was a fascinating chapter in our lives. We now reside in a small bungalow on the Lincolnshire coast where we have forged new friendships and interests.
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17 Responses to Energy in your pocket: Just a thought

  1. Steve Tanham says:

    Brilliant logic and breakdown, Di. If more people understood this, we’d stand a better chance of controlling exploitation.

  2. cagedunn says:

    Theft by any standard

  3. It is frustrating how so many things are out of our control. Gas prices, for our cars, are out of control because of all the taxes here in CA. Glad I don’t drive much because gas is over $4.50 a gallon. In other states it is closer to 2 dollars.

    To keep household costs down, I rarely run the air conditioner. I have no dish washer. I abide by the recommendations to run all major appliances before noon or after 9 PM (not that it is any cheaper to do that) and prices just keep going up.

    Being in a drought, I must water my plants and trees daily so I do it early in the morning. I have allowed my front lawn and back lawn to die so as to not waste water. It is a constant challenge.

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  5. fgsjr2015 says:

    I believe that the climate-change/green-energy aspect of any nation’s new infrastructure construction should include expanded mass solar-energy harvestation. Every structure could at least independently harvest solar energy as its own source of emergency power via storage system. There already are fossil-fuel-powered generator systems that engage once the regular electric-grid flow gets cut off, so why not use completely clean, renewable and free solar energy instead of the very old school, carbon-footprint intensive and often pricy solid-energy means?

    Also, it may no longer be wise/practical to have every structure’s entire electricity supply relying on external power lines that are susceptible to being crippled by unforeseen events, including storms of unprecedented magnitude, especially considering our very vulnerable overreliance on electricity. (Coronal mass ejections’ powerful EMF effects, however rare, leave external-source electrical grids vulnerable to potentially extensive damage and long-lasting power outages.)

    Albeit, if such solar-power universality would come at the expense of the traditional energy production companies, one can expect obstacles, including the political and regulatory sort. If it notably conflicts with corporate big-profit interests, even very progressive motions are greatly resisted, often enough successfully. And, of course, there will be those who will rebut the concept, even solely on the notion that if it was possible, it would have been patented already and made a few people very wealthy.

    • Thanks for commenting. We know of several solar farms and it is not unusual to see solar panels on the roofs of houses. In the cottage, it was not a viable option as our roof faced the wrong way anyway and was certainly not cost efective with an outlay of over £10K to implement which the ‘Government scheme of reimbursement’ was over 20 years at £500 pa. It was however viable on the boat and one of our intentions had we remained liveaboards. Back on land though, again installation is not cost effect for our budget. However, some new builds have solar panels, but others don’t.

  6. Carol anne says:

    Wow! That is outrageous! I have a smart metre now, and since I got it installed my electricity bills have decreased, which is nice!

    • All prices are due to go up if they haven’t already. The daily charge seems to make up the brunt of the increase, mainly because no-one can reduce consumption on that!

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  8. HowieRich says:

    Having you bills that high must depend on the size of property, and the occupancy, I’m fortunate i live alone, I wont tell you how much my monthly bills are

    • There are just the two of us and we live in a 2 bed bungalow which is very well insulated. Our energy consumption is pretty low compared to most, so a total gas and electricity bill of around £600 pa is below average and well within my budget.

      • HowieRich says:

        My flat is all electric, is it possible to go all electric? in one of my last propertites i had the gas meter removed, the only thing i used gas for was a gas cooker, got an electric cooker, no need for gas in the home, that may reduce your energy bill, thats if its possible?

      • The only gas we have here is our heating. If we had electric heating, our bill would triple. We used electric heating on the boat and our bills were about £60 pm in the winter. To be honest, I think our consumption is already minimal (3kwh a day on electric all year) so the only way to reduce our bill is to either freeze, or for the energy companies to reduce their fees.

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