With energy costs on the increase, consumers should look to make sure that this particular spending commitment does not unnecessarily turn up the heat up on their finances. In research carried out by moneysupermarket it was indicated that Britons who are on a pre-payment meter are often forking out far more for their gas and electricity than those on a standard tariff. According to the price comparison site a person on such a pre-pay plan will spend a typical 1,048 pounds for their energy each year. Such a figure is some 153 pounds above the 894 pounds charged on average by the country’s six major energy suppliers on their most competitive deal. And with around five million households indicated as being on a pre-payment price plan, such consumers are missing out on a total 769.6 million pounds in energy savings each year.
And in facing expensive utility bills, it is also possible that consumers could find that they struggle in managing other demands on their finances in areas such as loan repayments, mortgages, transport costs and credit cards.
Research from the price comparison site also indicated that of the most competitive deals offered by the six largest energy providers in Britain, EDF is the most expensive with the firm charging 964 pounds and 96 pence on its lowest price deal. Meanwhile, Scottish Power’s lowest priced annual fee stands at 897 pounds in comparison to the 845 pounds and ten pence from British Gas.
Commenting on the figures, Scott Byrom, utilities manager at moneysupermarket, said: “Rising energy costs have caused 14 per cent of gas customers and nine per cent of electricity customers on pre-payment meters to ’self-disconnect’ and go without heating and power because they cannot afford to pay for their energy. Pre-payment customers should not be punished for using this type of meter. It is painfully ironic that they pay a hefty price and are charged 17 per cent more on average than those who pay by monthly direct debit.
“In the Budget this year the government put forward proposals to treat pre-payment customers fairly. It is high time these promises are put into action.”
Mr Byrom went to assert that following the round of price hikes over the course this year, around 500,000 more households are now in a state of fuel poverty. However, should energy suppliers and the government fail to act he suggested that even more consumers could find that they develop difficulties in managing their utility bills. As such, those who were shown to be struggling with such a financial constraint were advised to consider switching to a credit meter or some kind of discounted tariff.
For those consumers who find that they developing problems in managing the various constraints on their finances, applying for a debt consolidation loan might be a recommended. In taking out this kind of loan, borrowers may find that they can merge numerous spending commitments at once, leaving them with an affordable monthly repayment. This could of particular assistance after a study by the Motley Fool in May showed that people were facing an eight per cent rise in the cost of living, more than twice the official three per cent set out in the consumer price index.
