Energy customers struggling to afford rising cost of living
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, 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, 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 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"