28th September 2021
Good morning Every adult in Northern Ireland can now apply for a £100 pre-paid voucher card to spend on the high street before the end of November. Almost 500,000 requests were made on the first day equivalent to a third of the adult population.
- Octopus Energy mega investment
- Student loans shake up
Octopus Energy mega investment
What’s going on?
Octopus Energy, the 6-year-old gas and electricity supplier, has received a $600m investment from Generation Investment Management, the climate change fund backed by former US Vice President Al Gore.
Why is this important?
It’s been a busy few weeks for Octopus. The UK’s energy market has been thrown into chaos following an unprecedented spike in wholesale gas prices. This has put many newer and smaller providers out of business.
Octopus, which was founded in 2015 and has 3.1m UK customers, has so far managed to weather the storm and recently took on the 580,000 customers of failed rival Avro Energy.
Yesterday it announced that Al Gore’s climate change fund has made $600m investment in the business, taking the valuation to $4.6bn. That’s more than double the $2bn that investors valued it at last December.
Gore, the environmentalist and former presidential candidate who co-founded Generation in 2004, broke news of the investment via a Zoom call to Octopus employees.
Octopus plans to use the funding to boost its renewable-energy business, specifically its green energy platform Kraken - software that helps manage power usage more efficiently.
The platform is used to manage 17m energy accounts globally, including Octopus customers, as well as those of rival suppliers such as npower, E.ON and Good Energy.
“While the UK energy market is currently in a tough state, it’s highlighted the need for investment in renewables and technologies to end our reliance on fossil fuels,” said Greg Jackson, Octopus’s chief executive officer.
Octopus has experienced rapid growth since launching as a challenger energy provider and is now one of the biggest suppliers in the UK. The latest investment by Generation also makes Octopus more valuable than Centrica, the owner of British Gas, the UK’s biggest supplier with 15m customers.
Student loans shake up
Speculation is growing that the government is considering cutting the threshold at which university graduates begin to repay their student loans from just over £27,000 to £23,000.
The potential change, first reported by the Financial Times, would mean graduates paying an additional £400 year.
The move would save the government as much as £2bn a year but would hit lower earners hardest.
Currently, English and Welsh undergrads who started university after 2011 repay 9% of everything they earn above £27,295 once they graduate. They repay this same 9% until they the loan is repaid, or until 30 years, after which point they stop repaying.
The Treasury is looking at ways to plug public finances after the pandemic led to the highest level of peacetime national debt. It comes after the government recently announced a 1.5% increase in National Insurance.
Unsurprisingly the talk of the change alone has led to outcry from students and unions.
Leading think tank, the Institute for Fiscal Studies said the policy would place “a substantial burden especially on young graduates, who may be saving up for a deposit or starting a family”.
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