Hard Pressed Energy Customers Struggling to Afford Rising Cost of Living
26 Sep, 2011, 17:00 BST
CHESTER, England, September 26, 2011 /PRNewswire/ --
- 71 per cent of British consumers will need to turn to their savings, credit cards or overdraft to fund rising fuel bills
- Full round of price hikes from the big six energy providers adds an average 17.4 per cent to gas bills and 10.8 per cent to electricity bills
- Now is the time to review your finances, urges MoneySupermarket
The most recent round of energy price hikes added an average £155.75 per year to the cost of energy bills, and with the overall cost of living continuing to spiral, 71 per cent of British consumers will need to turn to their savings, credit cards or overdraft to fund rising bills, according to MoneySupermarket.com.
A poll conducted by Britain's number one comparison site found two fifths of consumers (42 per cent) will need to dip into their savings to cover the additional energy costs. A further 17 per cent stated they will have to use their overdraft, while 12 per cent admitted they'd need to put the cost on their credit card as they would struggle to pay their bills.
Scott Byrom, energy manager at MoneySupermarket.com, said: "UK households are being pushed to the limit at the moment, so it's no surprise to see so many turning to their savings to make ends meet. However, consumers should try to avoid dipping into savings pots to pay for energy bills and instead examine their whole finances to establish where they can reduce their monthly outgoings.
"Those turning to credit cards or an overdraft to fund basic household bills need to be careful; while it's no bad thing to use credit to help manage outgoings occasionally, consumers must ensure they can repay any money they borrow or they run the risk of falling into a spiral of debt. A credit card can provide a short term cash flow solution but you need to be disciplined and make sure you pay off the amount before the next bill arrives.
"Bill payers will be reeling from the recent price hikes, yet despite the choice available for both gas and electricity, the majority of UK households are staying loyal to their energy provider, with 57 per cent of households never switching[2], and are therefore paying way over the odds for their gas and electricity. The latest price increases have added an average to 17.4 per cent to the cost of gas and 10.8 per cent to the cost of electricity, resulting in average annual standard bills of £1,322[3], now really isn't the time to be apathetic. Those who aren't shopping around for the best deal, are simply burning money; finding the right tariff for your consumption level and region means bill payers could save on average £313[3] per year. For example, the cheapest online tariff available is E.ON's Save Online V9 at £982 on average, but, for £1,009 per year on average, EDF Energy's Fix S@ver v2 product offers a safeguard against price hikes until Sept 2012 for only £27 a year more"
Notes to editors:
[1]Web poll run on the MoneySupermarket.com site between Friday 16th and Sunday 25th September 2011:
Energy price rises are adding about £200 a year to household bills. Will you struggle to cover increasing living costs?
- Yes - I'll have to dip into my savings - 42.4%
- Yes - I'll have to put more on my credit card - 11.6%
- Yes - I'll have to use my overdraft more - 16.9%
- No - I can manage on my monthly income - 23.6%
- I don't know - 5.6%
Total votes: 6,384
[2] According to a survey by Ofgem, 58% of gas customers have never switched their supplier while 57% of electricity customers have never switched. Therefore at least 12.3 million households have never switched supplier
[3]Incumbent Vs Best Tariff
Best Value Tariff Incumbent
Incumbent v Best Incumbent
Region Tariff (Fixed) Value v Best
Potential Potential
Saving Saving
Total (GBP) Tariff Bill (GBP) GBP %
EDF
Energy
Fix
Eastern GBP1,339.45 s@ver v2 GBP997.98 GBP341.47 25.49%
EDF
Energy
East Fix
Midlands GBP1,325.83 s@ver v2 GBP993.34 GBP332.49 25.08%
EDF
Energy
Fix
London GBP1,293.38 s@ver v2 GBP1,014.23 GBP279.15 21.58%
EDF
Energy
North Wales Fix
& Liverpool GBP1,373.36 s@ver v2 GBP1,023.47 GBP349.89 25.48%
EDF
Energy
Fix
Midlands GBP1,332.90 s@ver v2 GBP1,003.73 GBP329.17 24.70%
EDF
Energy
Fix
Northern GBP1,327.50 s@ver v2 GBP987.99 GBP339.51 25.58%
EDF
Energy
Fix
North West GBP1,351.30 s@ver v2 GBP995.85 GBP355.45 26.30%
EDF
Energy
North Fix
Scotland GBP1,281.31 s@ver v2 GBP1,032.11 GBP249.20 19.45%
Scottish
Power
Online
fix
South saver
Scotland GBP1,362.71 Dec 12 GBP1,015.23 GBP347.48 25.50%
EDF
Energy
Fix
South East GBP1,296.71 s@ver v2 GBP999.72 GBP296.99 22.90%
EDF
Energy
Fix
Southern GBP1,293.98 s@ver v2 GBP1,016.61 GBP277.37 21.43%
EDF
Energy
Fix
South Wales GBP1,309.13 s@ver v2 GBP1,035.57 GBP273.56 20.90%
EDF
Energy
Fix
South West GBP1,316.35 s@ver v2 GBP1,026.45 GBP289.90 22.02%
EDF
Energy
Fix
Yorkshire GBP1,298.10 s@ver v2 GBP973.23 GBP324.87 25.03%
Average GBP1,321.57 GBP1,008.25 GBP313.32 23.67%
Based on medium usage consumption
Sourced by moneysupermarket.com 19.09.2011
Price rises announced by UK energy companies Summer 2011
Electricity Average
Gas increase increase Standard Date Date
Provider (%) (%) tariff announced effective
Scottish Power 19 10 GBP1,391.21 07/06/2011 01/08/2011
British Gas 18 16 GBP1,286.04 08/07/2011 18/08/2011
Scottish and
Southern 18 11 GBP1,265.00 21/07/2011 14/09/2011
E.ON 18 12 GBP1,254.55 05/08/2011 13/09/2011
npower 16 7 GBP1,289.00 16/08/2011 01/10/2011
EDF Energy 15.4 4.5 GBP1,241.00 15/09/2011 10/11/2011
Average 17.4 10.08 GBP1,287.80
Standard / Online / Fixed - New consumption rates
Average
Standard Average Best
Provider Tariff Tariff Fixed Tariff
GBP1,125.42 GBP1,217.41
British Gas
GBP1,286.04 Web Saver 12 Fixed Price June 12
EDF Energy GBP1,009.05 GBP1,009.05
(wef 10th Nov) GBP1,241.00 Fixed S@aver v2 Fixed S@aver v2
GBP982.00 GBP1,189.88
E.ON GBP1,254.55 SaveOnline v9 Fixed Price Apr 13
npower GBP982.51 GBP1,126.52
(wef 1st Oct) GBP1,282.43 Sign Online 23 Go Fix 7
GBP1,190.20 GBP1,020.29
Scottish Power
GBP1,391.21 Online Energy Online Fixed Saver Dec 12
GBP1,142.18 GBP1,142.18
Scottish &
Southern GBP1,265.00 Price Fix 6 Price Fix 6
Average GBP1,287.80 GBP1,071.90 GBP1,117.56
Sourced by MoneySupermarket 19.09.2011
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