The cost of living crisis in the UK is devaluing our money and driving poverty. Little Rishi did his best yesterday to alleviate some of the pain of rising prices. It seems strange that OFGEM was allowed to raise the price cap so high for a second time. In the end, the chancellor protected the neediest and most vulnerable which was the right thing to do. I think he would have seen riots in the streets if he hadn’t taken this action.
He once again had to borrow to pay for it all. He spent another £15B. What hasn’t been mentioned is the huge amount of money that will now go to British Gas and its parent Centrica. Will they now make enormous profits? It has been said that the high prices are because of the global high prices of oil and gas but Britain only imports 3% of its gas. So British companies are now due yet another windfall. The big oil and gas producers and the energy companies distributing the gas will presumably make big profits. The electricity generators that produce electricity using wind and nuclear are already making bumper profits. Will there be more windfall taxes?
BP and Shell
A Shell shareholder was moaning about the windfall tax this morning on the forums but BP and Shell’s shareholders are still quids in. The Shell share price has gone up 5% just this month. Buying shares in big oil is a good buffer against rising energy and petrol costs.
Cost of living
It’s not just energy prices we have to worry about. Higher oil prices have sent petrol and diesel higher and even cooking oil has soared in price. Our disposable incomes are the same and when we have spent our money on the essentials and look at the discretionary income that is left, we find it has dropped substantially. For some people that discretionary income, the income left that we use to socialise,is now non-existent. If you have investment income that gives you more discretionary income but for people on low income that little extra income used to come from interest on their building society savings which now amounts to 0.1%!
eToro does give ordinary people access to the stock market and investing but it isn’t ideal. 70% of investors still lose money. I’m still in the black by 20% but you need to gain experience in investing. The pandemic offered some opportunities but it was also devastating for some companies.
The next year will be difficult and won’t be a good time to splash the cash. Keep saving and investing and learn how to cook a meal for 30p!