Hard Pressed Energy Customers Struggling to Afford Rising Cost of Living

Sep 26, 2011, 12:00 ET from moneysupermarket.com

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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