A good question for all of us is ‘what always seems to be going up and never down? The answer, our energy bills! This is an understandable question to ask, given that households have seen an increase in their bills of around 40% alone this year, which means that most of us are spending around £1,300 a year on gas and electricity.
To make matters worse, it is forecasted to get even more expensive. Annual gas bills are set to increase to around £900 and electricity to about £500 next year. The consequences of which are not only serious, but in some cases catastrophic. For instance, there are already nearly 5 million households that are considered to be in fuel poverty, which means that they can only afford to spend 10% of their yearly income on fuel costs. Industry experts claim that every 10% increase in gas and electricity costs will push a further 400,000 households into this poverty bracket.
Gone are the days therefore where pensioners were deemed the most vulnerable people during the cold winter months. Increasingly we are seeing families with young children, and those on low incomes being forced to choose between spending the little they have on heating or food. Many such families end up in debt, because they are borrowing to pay for basic necessities to prevent them from being cold or hungry.
There did seem to be a glimmer of hope in recent months, because the media coverage regarding the fall in wholesale energy prices led many people to expect a reduction in their fuel bills this winter. This was not the case, and to fuel further public fury, energy suppliers are releasing their exceptionally healthy trading results. So why are they refusing to pass on savings to their customers?
The argument energy providers are using is that wholesale energy prices do not determine household bills alone. There are many other factors involved like when and how well the supply was bought, and funding required for renewable energy projects that are vital to meet the country’s carbon emissions target.
They also claim that the short-term future of wholesale prices is highly uncertain, and it could be that prices rise within the next twelve months. This means that if they were to cut prices now, then they would have to be increased again in a matter of months. The answer therefore is that unless we take matters into our own hands, our winter fuel costs will not be any cheaper.
Many experts believe that the only way to reduce winter fuel costs is to compare prices of all energy suppliers or use websites like Uswitch.com and Moneysupermarket.com in order to find a better deal elsewhere. Those who do not, are more likely to be paying more pricey tariffs.
