What else is likely to happen in the months ahead to affect your outgoings and money matters, especially with costs continuing to increase, at least in the short term?
London-based newspaper Metro has undertaken an interesting exercise looking at possible changes to household bills still to come in the rest of this year.
Most are fairly obvious but may very well be things some have not yet factored into their planning for the months to come.
For example, interest rates currently stand at 4.5% after the Bank of England increased them again this month. However, as has been pointed out, the BoE has also said it intends to review the rate every six weeks, depending upon ‘how the economy is doing’.
That is another five reviews before the end of the year. Of course, the rate may not change at all, or not be increased at every review, but the BoE is keen to reduce inflation, which is currently at 10.1% as of March, a slight drop from 10.4% in February.
If the BoE did increase interest rates at every review and stuck to its traditional 0.25% rise, they could be at 5.75% by the end of the year. We should stress that we do not expect this, particularly with the expected reduction in energy prices this Summer. Far more likely is the easing of inflation with interest rates following by the year-end.
Nevertheless, it is worth households bearing that in mind and planning accordingly if they need to account for monthly mortgage and other debt repayments.
Another potential rise is the Energy Price Guarantee (EPG), which was extended for an additional three months to the end of June.
While the Ofgem Energy Price Cap level is £3,280, the EPG meant that a typical-use household bill was reduced to around £2,500 annually. But from July it will rise to £3,000 per year.
Ofgem will be making an announcement at the end of August about its new Energy Price Cap – which is due to take effect from October.
According to the House of Commons Library, the latest price cap forecasts suggest it will drop well below the EPG level in the second half of the year.
Stamps: It may not be a great deal in the scheme of things, but if you have a large number of the ‘old style’ stamps without barcodes, the deadline to use them up expires on July 31.
You can still use themed, commemorative and non-barcoded Christmas stamps beyond this date.
You can also exchange your old stamps for free through the Royal Mail ‘Swap Out’ scheme and there is currently no deadline for this.
To do this, download a ‘Swap Out’ form on the Royal Mail website, call Royal Mail on 03457 740740, or pick up a form from a local delivery office or Post Office.
All this demonstrates that as ever there are many external factors affecting your money and finances, so if you are planning for retirement, or anything else, you need to consider what might change and especially interest rates if it will significantly affect your household bills.