How much to live on

blue.peter

QrizB said:

I don't know which supplier you're with or how much your tariff acually costs

Good Energy, Standard DD tariff.

From January, I'll be paying 34.70p/kWh + 29.63p/day standing charge for electricity, and 8.46p/kWh + 32.95p/day standing charge for gas. (The percentages quoted in my earlier post relate only to the unit prices. The standing charges aren't changing.)

QrizB said:

... a hike in January is unusual; most people who aren't on fixed tariffs are paying the Ofgem-capped rate which was set on October and won't change again until April.

You raise an interesting point, and one that I hadn't considered. I assume that they know what they're doing.

QrizB

blue.peter said:

QrizB said:

I don't know which supplier you're with or how much your tariff acually costs

Good Energy, Standard DD tariff.

From January, I'll be paying 34.70p/kWh + 29.63p/day standing charge for electricity, and 8.46p/kWh + 32.95p/day standing charge for gas. (The percentages quoted in my earlier post relate only to the unit prices. The standing charges aren't changing.)

QrizB said:

... a hike in January is unusual; most people who aren't on fixed tariffs are paying the Ofgem-capped rate which was set on October and won't change again until April.

You raise an interesting point, and one that I hadn't considered. I assume that they know what they're doing.

Ah, Good Energy are one of the three(?) "green" suppliers who are permanently exempt from the Ofgem variable tariff cap. The others are Ecotricity and Green Energy UK.

You're paying the fair market rate plus a small premium for being green. If it wasn't for the cap, everyone else would be paying almost as much. As it is, however, Ofgem have capped variable tariffs to roughly 21p/kWh for electricity and 4p/kWh for gas, plus daily standing charges of around 25p per fuel.

blue.peter

QrizB said:

Ah, Good Energy are one of the three(?) "green" suppliers who are permanently exempt from the Ofgem variable tariff cap. The others are Ecotricity and Green Energy UK.

You're paying the fair market rate plus a small premium for being green. If it wasn't for the cap, everyone else would be paying almost as much. As it is, however, Ofgem have capped variable tariffs to roughly 21p/kWh for electricity and 4p/kWh for gas, plus daily standing charges of around 25p per fuel.

I've always known that I was paying a green premium, and am content to do so. I consider that acceptable.

I wasn't aware that GE was completely exempt from the tariff cap, though. I guess that means that I'm paying a bigger premium for the moment. Until the cap catches up. OK, so be it.

Thanks for the info.

[Deleted User]

Just thinking aloud, but perhaps the fuel price discussion warrants a thread if it’s own? 

My only comment on it is that I am pleased I stayed with British Gas. Not always  the cheapest, but resilient and reliable. My Homesure Insurance policy with them is also not cheap,but has been a lifesaver in recent months with several things needing repair. It has certainly paid for itself this year! 

As for increasing cost ,we keep our DD to a higher than needed level throughout the year to cushion the increases as well as signing up to a fixed deal that lasts to sometime in 2022.

blue.peter

blue.peter said:

I've always known that I was paying a green premium, and am content to do so. I consider that acceptable.

PS - it occurs to me that, in a rational world, green energy ought to be cheaper, not more expensive!

[Deleted User] said:

Just thinking aloud, but perhaps the fuel price discussion warrants a thread if it’s own?

Is fuel price not a part of the cost of living? I sort of see your point, but, just to play devil's advocate, I'd say that this is exactly where it belongs. It brings home the point that we need to take account of increases in the cost of living - whether gradual or sudden and huge - in calculating how much we need to live on.

Sterlingtimes

blue.peter said:

Baron_Dale said:

Just thinking aloud, but perhaps the fuel price discussion warrants a thread if it’s own?

Is fuel price not a part of the cost of living? I sort of see your point, but, just to play devil's advocate, I'd say that this is exactly where it belongs. It brings home the point that we need to take account of increases in the cost of living - whether gradual or sudden and huge - in calculating how much we need to live on.

Fuel prices seem to be inflating at a much higher rate than general inflation and will hit the elderly. I think that younger people will be shocked by mortgage interest payments increasing substantially for the first time. 

November's CPI is 5.1% and RPI is 7.1%. 

QrizB

[Deleted User] said:

Just thinking aloud, but perhaps the fuel price discussion warrants a thread if it’s own? 

Apologies Baron_Dale, you're quite right & there's an entire sub-forum that talks about little else: https://forums.moneysavingexpert.com/categories/energy If anyone really wants to get into the nitty-gritty you'll find a bunch of us over there!

blue.peter said:

Is fuel price not a part of the cost of living? I sort of see your point, but, just to play devil's advocate, I'd say that this is exactly where it belongs. It brings home the point that we need to take account of increases in the cost of living - whether gradual or sudden and huge - in calculating how much we need to live on.

I'd offer the observation that the average domestic energy bill is quoted as £1277 pa, makes up 5-10% of many people's total expenditure, prices are currently at a record high and are expected to rise by another 40-60% in April.

blue.peter

QrizB said:

I'd offer the observation that the average domestic energy bill is quoted as £1277 pa, makes up 5-10% of many people's total expenditure, prices are currently at a record high and are expected to rise by another 40-60% in April.

I suspect that it might be a higher proportion than this for those in retirement because many (most?) no longer have mortgages to include in their expenditure. I've just done a rough calculation, and found that energy now represents about 15% of my typical monthly expenditure. (That's after taking the January price rise into account.)

Sterlingtimes said:

November's CPI is 5.1% and RPI is 7.1%. 

This raises another point. Many index-linked pensions are subject to a 5% upper limit, in which case the recipients could get a below-inflation increase. If it's still over 5% in March, I will.

hugheskevi

blue.peter said:

This raises another point. Many index-linked pensions are subject to a 5% upper limit, in which case the recipients could get a below-inflation increase. If it's still over 5% in March, I will.

The PPF Purple Book is interesting on this point - showing that for pre-1997 pension accrual:

• About 20% of pensions have no increases
• About 30% of pension increases are fixed
• About 30% of pension increases are capped at 5%, the vast majority of these are RPI-linked
• About 10% are uncapped and 10% are 'other'

For post 1997 pension accrual, 70% of increases are capped at 5%, again with the vast majority based on RPI. The other 30% is mostly 'other' with less than 10% having uncapped increases.

Sterlingtimes

blue.peter said:

Sterlingtimes said:

November's CPI is 5.1% and RPI is 7.1%. 

This raises another point. Many index-linked pensions are subject to a 5% upper limit, in which case the recipients could get a below-inflation increase. If it's still over 5% in March, I will.

This is right. My annuity (ex-DB pension) is RPI to 5% cap. My other DB is RPI to 5% cap but CPI to 3% on the GMP element, Of course, the DC pension is exposed to the market.