Energy Price Cap Rise: what to do… and why we pay more than the rest of Europe
Feb 27, 2025
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Get ready to navigate the rising energy price cap, increasing by 6.4%. Find out why UK prices are soaring compared to Europe, with expert insights on the energy market. Learn how to cut costs on train travel and tackle childcare expenses. Discover the risks of 'pay by app' methods and hear shocking stories about unexpected bills. Plus, there's valuable advice on workplace pensions and managing council tax debt. Tune in for smart money-saving strategies!
The UK energy price cap will rise by 6.4% in April, compelling consumers to actively seek better deals to save costs.
Payment methods like PayByApp offer convenience but lack essential consumer protections, urging caution when used for significant transactions.
The transition to green energy affects pricing strategies, necessitating a regulatory balance between sustainability efforts and consumer affordability amidst rising costs.
Deep dives
Rising Energy Prices and the Price Cap
The energy price cap in the UK is set to rise by an average of 6.4% starting April 1, following two previous increases in January and October. This change means that typical users, who average £100 spent on energy, will experience a bill of approximately £106.40 for the upcoming three months. However, higher users will see their bills increase significantly more, with some facing hikes up to 9%. It's emphasized that the price cap serves as a backup for those who do not switch providers, and consumers are encouraged to explore better deals available in the market.
PayByApp Warning and Consumer Protections
Developing payment methods like PayByApp are gaining traction for their convenience and speed in transactions, allowing users to pay through their bank's application without needing card details. However, this method poses significant risks, as it lacks the consumer protections that traditional card payments provide, such as chargeback rights and section 75 protection. Users should be particularly cautious when using PayByApp for larger purchases, as they are exposed to potential loss without recourse should the transaction not go as planned. Therefore, it is advised to utilize card payments for bigger transactions to ensure protection.
Understanding Energy Tariffs and Consumer Choices
The discussion reveals critical insight into how energy tariffs are structured, particularly the distinction between standard and fixed tariffs. Many consumers are on standard tariffs governed by the price cap, but individuals are encouraged to switch to fixed plans to secure potentially lower rates. The conversation sheds light on the trends of energy costs, noting that while fixed rates may be higher now, predictions indicate that they could be more favorable than the rising price cap in the future, reinforcing the importance of active engagement with energy suppliers. Users need to actively shop around for the best deals, especially when they might qualify for more favorable rates based on their energy usage.
Impact of Green Energy on Bills
A significant theme is the relationship between green energy initiatives and rising energy costs. Despite efforts to transition to renewable sources, the complexity of energy pricing and the market's response to the situation in Ukraine has left many questioning whether green energy contributes to higher bills. The conversation highlights the broader implications of energy policy on consumer pricing and the need for a regulatory framework that balances the move toward sustainability with consumer affordability. Furthermore, there is a recognition that transitioning to greener solutions might come with upfront capital costs that could burden consumers in the short term.
Childcare Costs and Financial Support Options
The podcast also addresses the financial strain on families due to rising childcare costs and highlights upcoming changes that aim to provide increased support. Starting in September, providers will be offering up to 30 hours of funded childcare for children aged nine months to two years. It emphasizes the importance of early registration for families to benefit from these changes effectively. Information is shared about government schemes like tax-free childcare, which, despite its confusing name, can provide financial support and savings for parents if properly utilized.
The energy price cap, which determines prices for two-thirds of homes will rise by 6.4% in April… yet some people will see rises of up to 9%. In this pod Martin Lewis looks at what it means for you, and how do you beat it.
Former head of strategy at BP, Professor Nick Butler - who is now visiting professor at the policy institute at Kings College London - explains why UK energy prices are so much higher than Europe, the problems with the way the price cap is set, and the impact of green energy on our bills.
Plus, a warning on pay-by-app, a pension-themed Mastermind, and the Tell Us is about the most shocking, horrifying, unexpected bill you’ve ever received.
And there are tips on childcare costs and the scourge of council tax debt collection. There’s also urgent advice on how to cut the cost of train tickets, and what Martin told MPs this week about Lifetime ISAs.
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