You may have heard of the term Fuel Poverty and assumed it was something to do with there not being enough oil to go around. But what it actually refers to is the fact that a large proportion of the population find the cost of home energy, along with food prices, to be the two most crippling outgoings, when on a low income. The number of people deemed to be living in poverty in the UK is roughly 300,000 above the assumed published level. A study by the Joseph Rowntree Foundation, found that poorer families tended to devote a bigger percentage of their income to food and energy, which have risen quicker than luxury goods.
Oil prices down yet no change in energy bills
It seems strange that at the moment crude prices for oil have actually fallen by almost a third this year. We do see it reflected in the sale of petrol at filling stations, but the energy companies need to pass on declines in the price of oil to domestic heating customers. It is reckoned that every $10 fall in the oil price adds 0.5pc to growth in oil-importing countries, including the U.K. The consumer price index (CPI) measures changes in the price of a typical basket of representative consumer goods. This is updated regularly and gives indications of how prices are rising or falling.
The recent fall in import prices particularly for oil should in theory mean some kind of freeze on gas and electricity tariffs. It may be wise before things change to arrange a safeguard against inflation in the near future.
Electricity on the other hand appears slightly less expensive or affected by world availability. However it does give rise to quite a mystifying array of different tariff prices.
The importance of seeking every available way to save on bills has become paramount. It is therefore also a surprise that two thirds of signed up members to the Which consumer guide, said they had never considered switching energy suppliers to save money. They also state that of those who did switch, most found it an easy process and financially worthwhile.
Saving on energy bills is vital
To add more weight to the argument that savings on outgoing spending are vital, it is important to see the bigger picture. Britain has opted for short term growth in the hope that its continued high levels of deficit spending and European debt will be covered at some point in the future. Despite austerity measures, Britain and Spain have the largest budget deficit in the European Union. We appear to have low interest rates at the moment; this seems on the surface to be a good thing, but it also hides stagnation in the economy. When things start moving, which direction will prices go? It is considered that prices will rise by as much as 50% over the course of the next five years.
Savings on energy bills by switching your provider, will not be the solution to your monetary situation, but along with a concerted effort to re-organise outgoings it could free up income to spend on items you felt you could previously not afford. An average saving on energy bills over the course of a year could amount to £230 for someone who switches.
Energy Switcheroo has one main aim, to provide you with the information and a smooth switching procedure, to make it easy to find a cheaper source of energy in your home. Regular analysis of changing tariffs will also help with future switching.