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How Will Your Home and Business Be Affected by the Increasing Cost of Energy?

19.10.2022 by Jack H

Cost of living

Millions of UK homeowners now have optimism after the government decided to freeze energy costs, preventing the risk that their bills would increase by another 60% in October. Domestic energy bills had already hit a new high of £1,971 annually when the price cap was raised in April 2022.

When the price cap was raised again in October, consumers who were already facing a cost-of-living crisis because of astronomically high weekly grocery costs also had to contend with an increase in their energy costs. The resulting £3,549 in annual expenses would have set a record.

The two-year energy bill freeze promised by the incoming prime minister Liz Truss will result in an average bill increase to £2,500 per year starting in October; this will save households £1,000 annually compared to the earlier expected increase. It will stay frozen at this level until 2024.

By January 1st, 2023, up to 75% of British citizens would be fuel poor. If the original surge in October had occurred, people would have been forced to choose between eating and keeping their homes warm. Aging populations, including vulnerable ones, were cautioned to expect serious health risks by charities combating poverty.

The incoming PM's suggestion to set a £2,500 yearly bill cap is consistent with other government aid programmes that have previously received publicity. This also includes the £400 that will be given to everyone in Britain this fall to help with their energy bills and the £650 that the government will pay to individuals with low incomes, such as welfare applicants.

Why do utility bills cost so much?

Rising wholesale gas prices are to blame for the spike in gasoline prices, which has been labelled a national emergency and is widely believed to pose a threat to the populace comparable to the coronavirus pandemic.

There were worries before the PM made the announcement about the energy bill freeze that, in the absence of action, the cap may rise to £4,650 and then £5,456 the following year. Therefore, more than 20% of the typical UK household's income would be consumed by the cost of fuel alone. Some people would become fully dependent on assistance as a result, making life challenging.

As of 2021, gas and electricity were increasing at the wholesale level worldwide. Increased demand brought on by the economy's rebound from the Covid-19 lockdowns was said to be the cause of this. The typical UK household spent £1,400 on energy annually as of October 2021.

Russia's invasion of Ukraine in February, which resulted in major decreases in gas supply throughout Europe, made the situation worse. The price of natural gas increased dramatically to an all-time high. The cost of electricity also skyrocketed because of this.

The continent of Europe, which is a net importer of gas and is connected to Russia by pipeline, is likewise going through a gas crisis even though it only imports 3% of its gas from Russia directly. Since so many homes in Britain use gas for heating, there is a strong demand for it. Additionally, nearly one-third of the UK’s energy is generated by burning natural gas.

Thirty-one British energy companies went out of business in 2021 and 2022 due to the dramatic increase in wholesale pricing. Their previous customers have moved on to other market vendors.

Energy companies that are still operating are trying to raise consumer costs to cover the cost of the extra energy they use. The price cap will now run for three-month intervals rather than the prior six-month durations beginning on October 1 to properly reflect the current market volatility.

Why is the energy price freeze so crucial?

Energy costs might have continued to soar significantly if the three-monthly price cap increases had been permitted to continue. Enterprises would have experienced economic instability, and consumers of energy at home would have experienced poverty.

To protect consumers from expensive expenses, the ban was put into place in 2019. However, after failing to halt the current energy crisis that we are now facing, it was declared unfit for purpose. Significant price hikes that consumers cannot afford have not been stopped by it.

Exactly how the energy bill freeze will be paid for is currently unknown. According to reports, the government would borrow more than £100 billion to fund the aid programme the prime minister has outlined. Some believe that Britain's obligation to pay COVID may also be suspended.

This tactic, which helped Britain in the 1940s pay off its war debt, may mean refinancing the £311 billion debt the government incurred during the pandemic so that it may be repaid over a longer period.

According to research conducted in 2022, British individuals are increasingly taking out loans to pay for necessary needs like heating bills. The practice of "buy now, pay later," in which debtors take out a loan now and reimburse it over a longer period, has reportedly been extended to loans for utility bills, according to debt counselling organisations.

16 million people in the UK are likely to take out a loan due to their limited financial resources, including logbook loans secured by their cars, to pay for unforeseen bills of at least £300. Additionally, the amount of a logbook loan can range from £300 to £150,000, subject to affordability. To get through these historically unstable economic times, buyers may be thinking about pawning their unencumbered assets like prestige, classic, and vintage cars as well as other luxury items like fine art, watches, gold, and fine gems.

It's also important to keep in mind that pawning your luxury assets is a regulated loan that is non-recourse financing, which means your lender won't ever demand additional money if the value of their asset declines throughout the loan's duration. No matter if you are employed or self-employed, this is the ideal answer. Confidentiality is key, and since no credit reports are run and no search records are left on the credit file, the customer's anonymity is always guaranteed.

Getting Logbook Loans: The Application Process

Apply for a logbook loan either online or, in some cases, at a local lender's physical location.

Don't hand over the keys until you've verified that the lender is authorised to do so by the Financial Conduct Authority (FCA) and the Consumer Credit Trade Association (CCTA), the trade group that enforces standards for how CCTA members treat their borrowers.

Why not consider (LOYC), the UK's most trusted provider of 'Logbook Loans' and is directly licenced to operate by the Financial Conduct Authority.

To speak with a professional loan consultant, visit or call 0333 577 5000.

To learn more about how our loans will help you get through these difficult times, get in touch with

Missed payments could cause serious financial problems for you. For support, go to

To learn more about how our loans will help you get through these difficult times, get in touch with

Skipping payments could cause serious financial difficulties for you. For support, go to