BY Iona Bain AND MIKE YOUNIE
Energy prices have been a major talking point in the media recently – little wonder, when both households and politicians appear to be obsessed with this rather heated debate. Pardon the pub!
In recent years, consumers have increasingly felt the pinch of rising energy bills, putting their already tight budgets under excruciating pressure. Over the past 3 years, on average, UK household energy bills have risen by 21%, the equivalent of £221 per year. Many households have been forced to take drastic measures, trying everything to avoid switching on lights and using their heating.
So why have energy prices risen so sharply in recent years? There are a number of factors. Firstly, the big six energy firms have increased their prices by almost a third. Collectively the big six dominate the market, with a customer base of around 90% of all households.
Additionally, the infrastructure of the UK energy system has undergone some big changes in recent times. One of the biggest factors behind energy price hikes is the investment made by the industry in the development and improvement of our energy supply network. Transporting gas and electricity around the country is a serious operation – setting up, maintaining and upgrading this energy network costs huge amounts of money. And yes, you’ve guessed it – the cost is ultimately passed on to the consumers. It’s estimated that by 2020 over £118bn needs to be invested in order to keep up our energy supply.
Tax and levies on energy have also shot up in recent years, further affecting our bills. In fact, the European Commission recently said this was the biggest reason for the most recent spike in electricity bills.
So what have consumers been doing to tackle the rise in prices? Well, there are a couple of simple strategies that have recently proved very effective. When it comes to slashing energy bills, a typically overlooked piece of equipment is the energy efficient light bulb. As winter is drawing in and nights are lasting longer, we are all spending many more hours of the day with the lights on. As these energy efficient light bulbs draw less energy from the grid, you can light up your home relatively cheaply.
But one of the biggest issues surrounding energy prices and suppliers is a lack of knowledge on the part of consumers – particularly young people. Energy providers overwhelm us with a huge variety of tariffs, making the market very complex. This is creating a great deal of uncertainty among customers when it comes to shopping around. So many of us decide against it. Picking up the phone and speaking to different energy suppliers could strike fear into many hearts – especially if you’re not completely sure about what your options are. Then there is the danger is that you may hang up the phone having just signed up for a new tariff you have no idea about! However, if you have been with the same energy supplier for a number of years, switching could save you lots of money.
Recently Ofgem has launched a website – Go Energy Shopping – for consumers who are looking around for a new and cheaper tariff. Ofgem is the independent regulator tasked with keeping the energy market in check.
A three-step handy guide gives consumers the lowdown on how to slash their energy bills – understanding your energy consumption (and bills), compare the energy suppliers and switch the energy tariff.
Ofgem is also using a “Confidence Code” for all trusted, unbiased price comparison sites for you.
The website also includes a ‘glossary of terms’ to help explain any technical terms on your energy bill, links to useful website and a downloadable guide- everything you need to become energy savvy.
Check out www.goenergyshooping.co.uk and see how much you could save your energy bills.
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