Friday 29 July 2022

Don't put central heating on this winter and save yourself ~ £600 to £1,000

My energy bills (electricity and gas combined) for last winter:

Oct-21 £84.48
Nov-21 £101.40
Dec-21 £100.32
Jan-22 £113.33
Feb-22 £98.31
Mar-22 £97.81

A total sum of £595.65

I'm trying to work out how much more I'll pay this winter. It would be vastly simpler if they simply specified kwhs used for both elect and gas. But, it is what it is, so...

First of all, this applies to the UK.  OK, price caps were and will be:

Oct-21 £1,277
Apr-22 £1,971
Oct-22 ~£3,420
Jan-23 ~£3,850

For the upcoming 6-month winter period, we need to take an average of the Oct 22 and Jan 23 price caps. Average of £3,420 and £3,850 is £3,635.

So bills in the forthcoming 6-month period from 1/10/22 to 1/4/23 will be £3,635 divided by £1,277 multiplied by one's 6 monthly bill from 1st Oct 21 to 1st April 22.

Hence, in my own case, this is 3635 divided by 1277 multiplied by 595.65 = £1,695.53. This is an extra cost of £1,099.88 for me (£1,695.53 - £595.65 = £1,099.88
) compared to last year.

However, most of us received £150 from the Government, and we're all getting £400 (I think?), and other additional help for the poorest too. That's a total of £550 for most of us. So, for most of us, we need to find an extra £500 to £600 or so (but might vary a lot).

Of course, in practice, we'll be putting our central heating on less frequently. This is where it would be useful to know the price per kwh hour for both elect and gas.

But, anyway, Of that £565.65 cost last year I spent on energy, £264.49 of it went on gas.  That's 47% of my energy bill for the 6 winter months.  

So, if hypothetically, I don't use my gas at all, my energy bill for the forthcoming winter would be just 53% of my calculated £1,695.53, which is £902.72.  However, I'll need to get showers and wash the dishes.  Also, I bought myself a heating blanket in April that I will use this coming winter, which will marginally increase my electricity bill. But, maybe I could limit my total energy cost for those 6-months to, say, £1,100, a saving of ~£600? 
I should also point out that I only ever had my central heating on in the lounge, and not on all the time. Hence, others may save more than £600, possibly as much as a £1,000?

Since most of us are getting, or have got, £550 from the Government, that means, in terms of energy price inflation, many people, providing they never put on their central heating this winter, won't be any worse off than last winter! (of course there's food price increases, and all the rest, so don't get too relieved).

There is, of course, next April (2023).  But no one knows what the price cap will be then, nor what any Government help might be.  So let's just kick that worry-can down the road.

Update  26th August 2022   The price cap has been announced that will apply from the 1st October to the 1st January.  Above I mentioned that the estimate was
£3,420. It will, in fact, be £3,549.  Much more importantly, though, the price cap for 1st January 2023 to 1st April 2023 is not now estimated to be £3,850, but rather an utterly staggeringly high £5,386!  So for the 6-month period beginning on the 1st of October, the average will not be the £3,635 I mentioned above, but rather £4,468.

At this point, even if not putting the central heating on at all won't make ends meet, there's nothing else I can advise. We just have to sit tight and hope and pray that the next PM will supply adequate help for those that need it.  This will require a huge sum of money of many many £billions.  Since our next PM will almost certainly be Liz Truss, then there could be turbulent times ahead.  It could be very grim indeed for many people.

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