Issue #91 - Are energy prices going up again? 📈
Energy price cap increase | How is energy bought and sold? | Why does insurance go up after making a claim? | How to claim a tax refund | How did you start your business? | Words | Tunes | More
🦾 GO
Energy price cap to increase from October 🔥
Welcome to Issue #91 of The Backbone - the fortnightly newsletter from Bionic.
The domestic energy price cap will increase by 10% on October 1. This means an average household on a standard variable tariff paying by Direct Debit can expect to pay £1,717 a year on gas and electricity, at least until December 31, when the cap will change again.
But remember, the cap isn’t on overall bills, it’s on the standing charge and unit rates. This means that household bills will be higher or lower than the advertised cap, depending on how much energy they use.
And there’s no cap on business energy, so why are we even writing about it in a small business newsletter?
When Ofgem puts up the price of household energy, it could signal that energy prices will increase for businesses too. Especially when one of the reasons for the higher cap is that wholesale energy prices (the price suppliers pay for the power they sell to homes and businesses) are rising.
To quote energy market analysts, Cornwall Insight: “Over the past few months gas and electricity wholesale prices have rebounded, from their 30-month lows in February. The rise in wholesale market prices, particularly since the start of August, has been the key driver behind the forecast uptick in bills.”
We’ve been crunching some numbers too. The graph below shows how the price cap has changed across 2024 and how the average bills of Bionic micro business customers* are rising again after dipping around the same time the cap was lowered in April.
*Business energy bill figures are based on an average of the rates found for Bionic micro business (those using 10,000 kWh of energy or less a year) customer contracts in each quarter of 2024.
Energy prices fell steadily across 2023 and into 2024. But now that the energy market has returned to a relatively normal state with none of the volatility we saw in 2022, we can expect prices to rise steadily again. This was how things worked before Covid and before the price spike, as you can see from graphs on the Ofgem website.
But before the market calmed, wholesale energy prices rose by more than 500% year-on-year, between August 2021 and August 2022. And wholesale electricity prices increased by 37% between February and June this year. When wholesale prices rise, this usually means everyone’s bills rise too.
If your business energy contract is coming up for renewal (this can be up to ten months before its end date), it might be worth comparing quotes and sorting your next contract now.
🤝 COMMUNITY
Join our community of small business superheroes 🦸♀️
Small business owners are the superheroes of the high street. But small business owners rarely get their voices heard. Now there’s a place where they can chat, share advice and help each other through the lows and highs of running a business. To get involved, scan or click the QR code above or click the button below to sign up.
🔥 Energy - How is energy bought and sold?
Have you ever wondered why electricity is so expensive, even if you’re on a green deal that offers 100% renewable electricity? If it's generated by wind and solar (essentially 'free' sources), how can it be affected by soaring global gas prices?
It's all because of the way the UK's energy market works. In particular, a system called 'marginal cost pricing'. You can find out more about this and other ways your bills are affected by the energy market by clicking the button below.
🔒 Insurance - Why do business insurance premiums increase after making a claim?
If you’re a small business owner, you know that managing costs is a consideration when it comes to your bottom line. One area that often raises questions is the impact of insurance claims on your premiums.
Why do they go up after a claim? How much of an increase should you expect? From the amount of claims you make to the impact of inflation - different factors play a part in increasing premiums. We’ve laid out what businesses need to know in this guide.
🤝 Essentials - How to claim a tax refund
Getting your head around tax refunds and returns can be a real struggle if you’re a small business owner, not least because you have a million other things to worry about. If you’ve paid too much tax, you don’t want to jump through hoops to get back what’s yours. Read this Bionic guide to find out how to start the process.
🗣 SHOUTOUT
#BionicBusinessStory - 5 businesses, 1 question 🤔
It’s not unusual to ask yourself why you started running a business, especially when trade is slow or customers are trying. But there’s a great story behind every business, and getting repeat customers and good feedback makes it all worthwhile. We asked five business owners why they started out on their own.
Bionic - How did you start your business?
🐩 “I started the business because of Covid really. Dog walking as a career wasn’t something I’d ever thought of before. I lost my job during the pandemic, and it made me rethink what I’d like to do with my life, I decided I’d like to work with animals! I started getting into my local community, posting on this social media group called NextDoor to see if anyone wanted a dog walk, I found one dog-walking client and then another and another, and it built up.” Jane Bellamy, Jane Bellamy Dog Walking
🙂 “I’ve been in marketing for over 24 years. But after I had my second child, I didn’t want to be commuting up to town every day. I always knew I wanted to do something on my own. But I got really ill just before Covid hit and all my plans were put on hold. While I was recovering, I decided I wanted to do something safer for myself, something more secure.” Jo Tiller, The Social Club
🎂 “I wanted to start my own business for two reasons really. To have something for myself but also keep my mind busy and put my talent to use. I’m a mum of two young children so I wanted something I could do for me, but also teach them about too.” Heidi Kay, Handmade by Heidi
💅 “We started as a small two-room salon and have now grown to a team of 55. I trained as a therapist when I was 16 before going to university to complete a management degree. Then I worked in finance for a short time before returning to the beauty industry and have now spent the last 18 years building Sleeping Beauty Salons.” Lilac Miller, Sleeping Beauty Salons
🦸♀️ “I’d always wanted to open my own gym from the age of 18 and managed to achieve my goal by 30 in the end. We originally started as Evolutionz gym when we opened back in 2012. After a couple of years trading as Evolutionz gym I decided to change the name to Heroez to help make the gym more fun and less intimidating. I wanted a fun, light-hearted theme and what’s more fun than a superhero?” Tyrone Haughey, Heroez Gymnasium
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📊 BUSINESS
Get your business costs sorted 💷
Bionic - the business price comparison experts - compare a range of business essentials to help you save time, money, and hassle.
Our tech-enabled team will answer all your questions in simple terms, and help you find the best deal on business energy, insurance, phone, broadband, or finance. No jargon. No-fuss. #BeABionicBusiness 🦾
🎧 LISTEN
Playlist 🎶
Remember the “Now That’s What I Call Music…” compilations? Well, someone has put together a playlist of EVERY SINGLE ALBUM from number 1 to number 114 - that’s 4,585 songs and more than 24 hours worth of listening! (FYI - Number 117 came out in April this year, marking 41 years since the first one hit the record shop shelves).
Podcast 🎙
Freelancing? Being boss of your own life and business can be tough and isolating. But it can also be totally rewarding. Pick up tips, advice and thoughts on how to make it as a freelancer, an entrepreneur, as the owner of your own business, by hearing other freelancers share their experience on the Being Freelance podcast.
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🏡 HOUSEKEEPING
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🚫 STOP
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