Bridgewater

Energy Bills Unaffordable For Many

Oct-06-2011 - Energy bills are already unaffordable for a third of consumers in the UK and that’s before the costs of the Government greener energy investment programme are added.

Research by uSwitch show that many householders cannot afford any further increases to their energy bills and casts doubt over their ability to help foot the bill of the Government’s ambitious carbon reduction plans.

The country faces a £200 billion investment programme which includes the cost of cutting carbon and switching to renewable generation. But already nearly 30% are struggling to afford their energy bills after a year of hefty price increases which have seen the average household energy bill hit an eye watering £1,293 a year.

There is an ‘affordability ceiling’ above which the impact of increased energy prices on households would be severe – including rationing energy usage, turning off heating entirely and going into debt to pay energy bills, as well as trying to reduce bills through energy efficient measures.

This ‘affordability ceiling’ is when bills his £1,500 a year and worryingly the UK is only a small step away from seeing this as the average household energy bill would only need to go up by £207 or 14% to hit it.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: “The facts speak for themselves: almost 7 million households living in fuel poverty, a third of people saying that energy is already unaffordable in the UK and over a quarter already struggling to afford their bills.

“And sadly that isn’t the end of it – we are facing a £200 billion shopping list of investment required to secure our longer-term supply, cut carbon, boost energy efficiency and roll-out smart metering into all homes.

Unfortunately for consumers, British households can expect to be footing the bill. I would urge the Government to calculate the full cost that will be passed onto household energy bills and to then think again about the impact on affordability in the UK.”

Richard Lloyd, executive director at Which?, says: “The overwhelming majority of people tell Which? that the price of gas and electricity is their biggest financial worry*. The rising cost of living has already forced almost half of us to cut back on essentials**, and this was before some of the recent energy price hikes had even taken effect**. It’s now vital that the Government and energy suppliers work together to help consumers manage their energy bills this winter.”

MoneyHighStreet comments: “Energy prices are a worry for the majority and we totally agree that the Government and energy suppliers must work together to help consumers.

“In the meantime, consumers really must do all they can to make sure they get the best energy deal possible to suit their needs – for example how about the uSwitch cashback offer for switching energy to the iSave8 First:Utility plan before the 12 October 2012?

There’s also the question of using a real-time energy monitor – according to a recent study by Edinburgh Napier University, real time energy monitoring cuts bills.

“Of course also look to see how you can save on your energy usage – start with such as reducing your heating by one degree, perhaps do your washing on a lower temperature too. How about switching lights off when you leave a room? Focus on lots of little things and you’ll be surprised just how much energy you can save.”

* Which? surveyed 1,298 members of the UK public (aged 18+) in June 2011 – 89% said energy bills were a concern.

** 48% cut spending on clothing; 36% on energy bills; 35% on motoring; 34% on groceries.  65% plan to cut back on their spending in the coming months.

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