MSE News: Energy price cap set to change every three months

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  • facade
    facade Posts: 7,065 Forumite
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    edited 21 December 2023 at 3:18PM
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    The proposed changes to the price cap review will bring further pressures on those with limited income, and pensioners alike.
    The review proposed for July, will probably indicate a lower average, since energy will not be in demand at that time.
    As such. when pensions are calculated in September for the following year, the overall inflation rate will be lower, hence a lower settlement.   Over the years, this system has enabled Governments to reduce expenditure on pensions, whilst knowing that from October, inflation rises.  Not just coincidence !!
    You may be correct in what you say but there is another problem that is going to affect pensioners reliant (partial or totally) on occupational pensions (as I am).  When my pension increases are calculated after the September inflation figures the maximum many, on such pensions, shall be receiving will be a 5% increase irrespective of what CPI and RPI are doing in September 2022.  None of the forecasts I see at the moment suggest it will be below 5% in September.  True the state pension should be based on the triple lock but we all know what happened for the 2022/23 increase.  I calculate that my expected expenditure for energy for the current tax year will end up being circa £1800+ (assuming another 30% rise in October - a mouth-watering 13% of my disposal income).  We are managing but have had to prioritise in other areas of spending to avoid going into long-term savings - we are fortunate to still have a safety net that should hopefully remain largely intact until my state pension kicks in in 2024.    



    I'm in the same boat, the 100% increase in my energy bill has taken most of my discretionary income. (I learned a new word! discretionary income is left over money after all the bills are paid- what I can save (I wish) or spend on sweets and drugs etc. Disposable income is just your nett income)

    Another 100% increase and I will be paying energy bills out of my savings.

    I knew that things would gradually get harder after I retired, I just didn't expect it to happen so quickly, and I also have a few years until my state pension starts :(
    I want to go back to The Olden Days, when every single thing that I can think of was better.....

    (except air quality and Medical Science ;))
  • brewerdave
    brewerdave Posts: 8,525 Forumite
    Name Dropper First Anniversary First Post
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    The proposed changes to the price cap review will bring further pressures on those with limited income, and pensioners alike.
    The review proposed for July, will probably indicate a lower average, since energy will not be in demand at that time.
    As such. when pensions are calculated in September for the following year, the overall inflation rate will be lower, hence a lower settlement.   Over the years, this system has enabled Governments to reduce expenditure on pensions, whilst knowing that from October, inflation rises.  Not just coincidence !!
    You may be correct in what you say but there is another problem that is going to affect pensioners reliant (partial or totally) on occupational pensions (as I am).  When my pension increases are calculated after the September inflation figures the maximum many, on such pensions, shall be receiving will be a 5% increase irrespective of what CPI and RPI are doing in September 2022.  None of the forecasts I see at the moment suggest it will be below 5% in September.  True the state pension should be based on the triple lock but we all know what happened for the 2022/23 increase.  I calculate that my expected expenditure for energy for the current tax year will end up being circa £1800+ (assuming another 30% rise in October - a mouth-watering 13% of my disposal income).  We are managing but have had to prioritise in other areas of spending to avoid going into long-term savings - we are fortunate to still have a safety net that should hopefully remain largely intact until my state pension kicks in in 2024.    


    Spot on - my occupational pension will increase in October , in theory,based on the RPI for May (which will probably be ~ 12.5%+) BUT the increase will be constrained by the "5% rule" AND part of my pension is pre 88 GMP which doesn't increase anyway !!
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