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Homeowners Set For 'Rough Ride'

Jan 9, 2008
A price rise announcement earlier today by one energy supplier could spell increased financial pressure for many Britons, it has been suggested.

According to price comparison website uSwitch, moves by npower to hike its tariffs may act as an impetus for other companies to do the same. The firm is to increase its gas and electricity prices on its standard tariffs by 17.2 and 12.7 per cent respectively. In turn, some 4.9 million will see costs rise by 92 pounds and 48 pounds. This leads to an extra 139 pounds being added on to the typical dual fuel energy bill making it account for 1,047 pounds. After such a rise, many of the firm's customers may well struggle to meet other sources of financial demand such as personal loans and grocery bills. It was also put forward that the new year price rise "wipes out" the 12 per cent cuts npower made in 2007.

Commenting on the news, Tim Wolfenden, head of home services for uSwitch, said: "The prospect of being able to raise prices has had suppliers champing at the bit, so it was always just a matter of time before one of them made the move. By announcing price increases today, npower has given the other suppliers the green flag they've been waiting for. The coast is now clear for a general price hike and energy bills can be expected to top 1,000 pounds again - consumers are going to be in for a rough ride this year."

And with the npower price rises due to take effect from tomorrow (January 5th), Mr Wolfenden advised consumers to "switch now to reduce the impact of higher energy bills on their household". By not changing energy supplier, it was suggested that the country could be losing out on more than 2.3 billion pounds. With an individual cost of 324 pounds, apathy towards moving to a more competitive utility provider could well result in many consumers experiencing problems with other demands on their spending, such as loans, mortgages and overdrafts. The uSwitch representative stated that in particular those who have never switched should do so now, while the only people who can have the luxury to "sit back" are homeowners who are already on a competitive online energy deal.

The price comparison website went on to claim that today's announcement will give the "green light" to other companies to increase their prices. As such, many more people may discover that their ability to pay loans, credit cards and other sources of financial demand comes under more strain due to higher energy costs. The news follows increases in 2006 which saw prices go up by an average of 38 per cent, or 277 pounds. Over the course of last year however, costs only dropped by 101 pounds, despite wholesale energy going down by 56 per cent.

Homeowners worried that they will be unable to cope with the prospect of higher energy bills may wish to consider applying for a debt consolidation loan to help ease such troubles. This type of loan could assist many consumers as they may be able to pay off numerous demands on their spending, leaving them with a single low-rate payment to make each month. Meanwhile, Ann Robinson, director of consumer policy for uSwitch, claimed that the only way consumers can lessen pressure on their finances is by being proactive and " taking action themselves ".
About the Author
Tom Dawson writes for Essentially Home Loans. Our visitors can apply online for secured personal loans and debt consolidation loans at the lowest interest rates.
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