Paying the Middle East premium
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While I write this column, the sun is shining in my window which brings a bit of cheer, unlike the spectre of rising bills that faces us.
From mortgage rates to the price of fuel, cost of living pressures are increasing and there seems to be no signs of relief anytime soon.
And when it comes to energy, consultancy Cornwall Insight has said that bills could go up by £332 in July when Ofgem sets the new price cap. This is largely down to the conflict in Iran which is continuing to disrupt global oil supplies.
Home energy specialists at Free Price Compare, explain: “This ‘Middle East premium’ will hit households hard just as summer arrives. Families should review their energy contracts now and consider fixing rates before the July price cap increase takes effect.”
Some areas of Scotland are being hit particularly hard by the situation because so many rural homes are off the gas grid and rely on heating oil, which has more than doubled in price in recent weeks.
About 6 per cent of households in Scotland use alternative fuels, with rural and island areas disproportionately affected, according to the Scottish Government. It is estimated some 142,000 Scottish households rely on heating oil.But governments are taking action. The UK Chancellor earlier this month confirmed that more than £50 million will be provided for low-income families who have to heat their homes with oil. Some £4.6m of this total has been allocated to Scotland, and the Scottish Government is making available an additional £5.4m.
Next Wednesday, 1 April, the Scottish Emergency Oil Heating Scheme will be launched under the auspices of Advice Direct Scotland. Thanks to the scheme, households in Scotland struggling with the cost of oil and liquid petroleum gas (LPG) for heating will be able to apply for £300 of support with their bills.
Heating oil is different from other products in the energy market as it is not regulated by Ofgem. The UK Government intends to introduce new consumer protections for customers and is exploring ways to step in to support households. While this could take some time, any changes implemented will hopefully curtail the extreme volatility of prices in the future.
With the start of the new tax year fast-approaching, this edition of Scotsman Money focuses on ways to make the most of your allowances, for example using your ISA tax-free cash limit. Meanwhile, in our Q&A, Alison Pearson of Acumen Employee Benefits explores the advantages of salary exchange for both businesses and workers.
If you have a personal finance question email scotsmanmoney@scotsman.com and sign up for our newsletter online at www.scotsman.com/newsletter
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