uSwitch.com offers New Year hang over cure

As the nation heads towards a collective hangover of festive excess, uSwitch.com, the independent comparison and switching service, offers some helpful hints to ensure that your wallet isn’t as strained as your waistline going into 2007. Each household could make a saving of up to £1000 on household bills and financial products through a simple financial makeover this New Year.

Energy Bills

The past year (2006) has been an annus horribilis for domestic households who have suffered a ‘triple whammy’ of rising interest rates, council tax hikes and soaring energy bills. There have been an unprecedented 13 price hikes in 2006 resulting in a massive 36% rise in gas and electricity prices, adding £261 to the average annual bill. The number of energy customers struggling to pay their bills continues to escalate at an alarming rate, with an additional 1.25 million customers estimated to have fallen victim to fuel poverty since the start of the year.

In a trading statement on Friday, British Gas provided assurances that prices will come down in Spring 2007, but hasn’t confirmed how much bills will be reduced. Customers on its online tariff still have to stomach another price rise on 8th January when the company lifts the price freeze on their Click Energy product. On New Year’s Day, Scottish and Southern Energy customers will also be hit by its final price-rise, held over from 2006.

However, help is at hand. Customers who switch gas and electricity can save up to £325. If the 10 million customers who have never switched do so, this could save the UK £2.71 billion.

Tips for lowering your fuel bills:

Make a change: Avoid the standard products offered by the local incumbent supplier in your area, this is likely to be British Gas for your gas supply and your local electricity board

Double up: signing up for a dual fuel tariff i.e. getting your gas and electricity from the same supplier, could entitle you to a discount of up to £28

Get connected: if you can manage your accounts online then your bills can be reduced by up to 7%.

If you have never switched before, moving to a dual fuel online tariff and paying a monthly direct debit could save you up to £271.

Get Energy Efficient: Turning your heating down by a degree will save you 10% on your annual energy bill and ensuring that your home is properly insulated will drive down the costs too –

Don’t leave household appliances on stand-by – The average household spends about £37 per annum by leaving appliances on stand-by

Use energy saving light bulbs – This can cut energy wastage by over three quarters as UK households use £1.9 billion worth of electricity every year on lighting. If every house installed 3 Compact Fluorescent Light bulbs enough energy would be saved in a year to supply all street lighting in the UK.

Geoff Slaughter, Commercial Manager for Home Services at uSwitch.com, comments: "Energy bills are spiralling out of control. The average household's combined gas and electricity bill has risen from £735 to more than £1000 after a year of unprecedented price rises. Add to this, the 18% increase in water bills forecast between 2005-2010 and you understand why organisations such as the Citizens Advice Bureau have seen a 19% increase in people drowning in debt as a result of their utility bills.

"Consumers can get a handle on their home finances by switching their energy providers. We urge all consumers to review suppliers regularly and the New Year is the ideal time to make a change. There are savings to be made, so don't let your bills bite this winter."

Geoff Slaughter comments on energy prices in 2007: " Energy companies have been quick to pass on the rises in the wholesale gas market but appear reluctant to pass on savings after wholesale prices have fallen over the course of 2006. If this reduction in wholesale costs is not passed on to consumers by early in the New Year - we expect Ofgem to conduct a formal inquiry into retail energy prices. Energy companies must find a balance and we would like to see a consistent, generous reduction in household bills reflecting the fact that gas is being purchased more cheaply."

Communications bills

2006 has been a huge year of change in the communications industry and consumers are now benefiting from even lower bills as companies work harder to compete for new customers.

Home Phone

uSwitch.com reveals that the 10.4 million households who are still with BT could save up £140 a year on their phone bills just by switching providers. Calling loved ones over VoIP and Skype also provides a cheap and easy way of keeping in touch in the New Year. On average, VoIP is 82% cheaper than BT Option 1 for calls to France or the USA and 79% cheaper for calls to Australia. With 1.5 million new broadband connections this year, VoIP is becoming an increasingly popular way of calling long distance.

Broadband

More good news - prices fell by up to 17% in the first 10 months of 2006 and this trend looks set to continue in 2007 as companies merge or buy out so they have the ability to survive in an increasingly competitive market. Customer service has fallen since the introduction of ‘free’ broadband so this will be one of the hot topics in 2007 for the telecommunications industry.

For the six million broadband users who are likely to review their Internet deal this year, they should focus on two areas:

Up to speed: Avoid getting a quicker connection speed than you are likely to use. Paying for a fast connection speed needlessly could lead to wasting as much as £149 per year.

Get Served: Ensure that you are with the best supplier for your chosen connection - in terms of both cost and service; costs can vary by as much as £180 a year.

Steve Weller, Head of Communications Services at uSwitch.com says: "The telecommunications market is very competitive and this means that prices are being driven downwards. Customers with a BT line have a wide range of alternative suppliers to choose from, such as TalkTalk, Tiscali, the Post Office and even companies like Tesco Telecom.

"There is a present trend towards offering bundles, where it is possible to get more than one service from the same supplier. For example, broadband and phone from TalkTalk, broadband, phone and digital TV from NTL: Telewest or broadband and mobile from Orange. However, customer service levels vary greatly between these companies, so consumers should always consider their own circumstances, and make sure that they understand the deal before signing up to it.

“Generally, while the market can appear confusing, it is important for people to shop around as there are some fantastic deals to be had and the intense competition in this space means that there should be something to suit everyone.”

Personal Finance

With consumer debt increasing by £1 million a minute, the New Year is the perfect time for consumers to review their finances and consider switching to the most competitive products.

Britons can save a staggering £6 billion by reviewing their credit card provider and ensuring that they are using the card that is the most suited to their needs.

In addition, consumers could also save a collective £5.6 billion by choosing a lower rate loan. This will become increasingly important in keeping outgoings down, as loan rates continue to rise – six months ago there were 10 providers offering sub-6% APR deals with Moneyback Bank topping the tables with a 5.5% APR loan. Today, there are only seven lenders offering sub-6% APR deals, the most competitive of these loans across all tiers is Northern Rock currently at 5.8% APR.

Perhaps the most significant figure of all is that current account customers in the UK are wasting £1.31 billion by remaining loyal to the big four banks which offer interest rates more than 50 times worse than the market leading providers.

The global figure for money wasted by remaining on uncompetitive financial products has now exceeded £12.8 billion annually. The average consumer can save £195 by switching to a cheaper credit card provider, £224 by switching to the best value home loan and £28 by finding the best bank account to suit their needs.

Nick White, Director of Financial Services uSwitch.com comments: "With interest rates changing so quickly it's important that people keep an eye on their personal finance products to ensure they are getting the best deal. Often banks will offer best buy deals for a limited period of time and many people forget to switch away when the offer ends. This is a particular problem in the credit card market with so many people enjoying 0% deals on balance transfers and new purchases for a short space of time before the rates revert to double digit APR’s.

"The current account market has never been so competitive with in-credit interest rates at an all time high. Current accounts now pay anything up to 6%, so a significant amount of money is being lost by those people that chose to stick with familiarity instead of switching to a better deal. The bank now manages the entire switching process so it will take minimum time and effort on the customer’s part.

"We have already found that 25% of people with packaged current accounts never actually use the perks provided. At an average annual cost of £120, it's an unnecessary expense and often interest is minimal. Also, first direct will be the first to charge £10 a month for a standard banking service if customers do not deposit a minimum of £1500 or take out a second financial product. It looks likely that other banks will follow suit. With this in mind, it is imperative for the consumer to keep an eye on any changes to their current account and make sure they are one step ahead of the banks."