What the Government's new green plans could mean for you

Prime Minister Boris Johnson says that the strategy, announced recently, will “be paved with well-paid jobs, billions in investment and thriving green industries”.1

However it will also have to be paid for, affecting the price of energy, transport and possibly leading to higher taxes. Whether you are worried about your energy bills, wondering about getting a new car or looking for new investment opportunities, it is sensible to look at what the deal means going forward.

For your energy bills

If you have a gas boiler (and most of us do) consider this week’s announcement to be your notice to upgrade, although not for a while.

New gas boilers will be phased out in 2035, although existing boilers will still be usable after that date. Instead, you will need to have either a heat pump or (possibly) a hydrogen-ready boiler, depending on how the technology around that improves.

The government wants these pumps to be as cheap to buy and run as a gas boiler. At present this isn’t the case, but it seems certain that gas prices will rise, and the cost of the pumps will fall as more people get them. Until that parity is reached though, the government will pay £5000 towards the cost of air source heat pumps from next April or £6000 towards more expensive ground source heat pumps.

Meanwhile, Business Secretary Kwasi Kwarteng stated that the government wants to bring down the price of electricity by shifting levies from electricity to gas,2 meaning that actions that you take now to reduce your gas usage should pay dividends in the future.

For your car

The petrol crisis has prompted many of us to think about buying an electric vehicle, especially since it comes at a time when petrol prices are surging and there is a new low-emission zone being introduced in London that means many will have to change their cars.

There were big promises and little clarity for those wanting to buy electric vehicles from the government’s announcements though. There was £620m allocated for electric car grants, some for plug-in vehicle infrastructure and some for the cars themselves. There are grants already, which go to the manufacturers and take down the price of the vehicles themselves but this new money may extend the scheme.

Some employers also offer salary sacrifice schemes that can take down the amount of money you pay for electric vehicles by allowing you to pay for them from your pre-tax income. An article here from Autotrader explains how this works.

For your investments

Sustainable investments are already popular. The Government’s new green plans mean that some areas of sustainable investing may become more popular still due to the vast amounts of money that will be poured into them.

The plan includes £500m for innovation projects, bringing  the total funding for net zero research and innovation to at least £1.5 billion, while there is also funding for nuclear projects.

Meanwhile the requirements for the private rental sector and commercial property sector to improve their energy efficiency means that investing in energy saving and regeneration looks like it may be a good idea over the medium to long term.

A financial adviser should be able to help you to work out whether sustainable investments are suitable to you and to ensure that your portfolio is tilted towards the investments of the future.

1 https://www.gov.uk/government/news/uks-path-to-net-zero-set-out-in-landmark-strategy
2 https://www.gov.uk/government/news/plan-to-drive-down-the-cost-of-clean-heat