In the news we have heard about quite a few energy companies going bust. This was due to the fact whole sale costs of energy was going up, and the suppliers were bound by a price cap on what they could charge.
The energy suppliers costs went up, but they could not cover that cost by raising prices, so they went bust and out of business.
Those customers affected are being switched to a new supplier, which in reality will cost them more.
So it would appear our energy bills are going to increase.
I know some people whose tariffs are locked in, but only until the end of the year, then they, too, will face an increase in their gas and electric bills.
How much of an increase you ask??? This is where it becomes a projection, but possibly 12% or more. So if you pay £100 a month for gas an electricity, which is £1,200 a year, you could see your payments rise by £12 a month, or £144 a year.
Next there is the rise in food costs, in part due to shortages and also supply chain issues. As to how much this increase will be, some project 2%, some as high as 5%. And this increase in food costs will affect restaurants, and when you couple this with the VAT increase from the pandemic reduction of 5%, to 12.5%, for restaurants, it is going to cost more to go out for a meal.
In April 2022, the VAT for restaurants will go back to the full 20%.
Let’s add into the mix that benefits for those on Universal Credit are now reduced by £20 a week, and the furlough scheme has ended, which for some will reduce what money they had coming in.
Once the furlough scheme has ended, many employers will not have the volume of business to bring back all their employers.
Is there more doom and gloom? Possibly, taxes going up, and NI/National Insurance increases.
In many ways, if you include the petrol crisis, it really is a “perfect storm” of economical proportions.
The good news is we appear to be on the other side of the pandemic, we just now need to pay for it….financially.