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Your Money > Family Finances Articles > Winners and losers...
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By Sarah Modlock
Hot on the heels of big price hikes comes the dreaded news that some people may never be free of big bills, depending on where they live. Huge variations in gas bills across the UK could be on the cards after Npower said it will introduce regional pricing. The move comes just days after the company pushed up electricity prices for its domestic customers in a rise of 12.7% and gas bills by 17.2%. Amid rumours of further industry rises, other major energy firms may now follow the move to regional pricing, with those customers who live inland set to suffer the most from the so-called postcode lottery. Gas prices could rise by almost a quarter for single fuel customers in London and the East Midlands. Householders in the capital could see gas bills from £532 a year to £653. People in Scotland could emerge better off if the regional scheme is introduced as they live closest to the major pipeline that comes in from the North Sea at St Fergus. The average combined gas and electricity bill is forecast to surpass the £1,000 per year mark imminently. Who wins and who loses? Npower's Standard customers in the Northern England region will now pay close to £100 more than their Scottish counterparts. Medium users in Northern Scotland will pay £1,010 for gas and electricity, and £1,024 in Southern Scotland, while those in Northern England will pay £1,104. Standard Npower customers in the Midlands and Yorkshire will also suffer, paying over £1,080. Those in London were hit with the biggest increase of 21.7% with North West England and Eastern England also seeing rises around 20% or more. The research by price comparison site moneysupermarket.com also found the cheapest product on the market - British Gas Click Energy 4 - is £371 less than Npower's Standard offering in Northern England over the course of a year for a medium user. To make matters worse, energy providers are failing to inform their customers of new cheaper tariffs, causing them to languish on more expensive tariffs and reaping the energy companies more than £2.5 billion per year. All six of the big energy companies have updated or launched cheaper tariffs in the past 12 months. With nearly two thirds of customers on a standard tariff, the average household could save £150 a year by moving to a better deal with their current supplier. Energy providers rarely, if ever, tell existing consumers about cheaper options, as the more expensive tariffs allow them to offset the great deals they offer. Allowing existing customers to languish on old tariffs is a money spinner, but it doesn't help build trust or loyalty. "Banks adhere to a Banking Code, so why can't energy providers adopt a set of standards to be fair and transparent with their customers when they launch cheaper products, says moneysupermarket's Paul Schofield". Part 4 of the Banking Code states: 'To help you compare interest rates on all our savings accounts more easily, at least once a year we will send you a summary of these products and their current interest rates.' It adds: 'If you have a variable-rate savings account and the interest rate has fallen significantly, we will contact you within a reasonable period of time to tell you about our other savings accounts and offer to help you to switch to one of these accounts if you want to.' Paul Schofield adds: "The need for a banking-style code is obvious with our research finding over 60% of Brits oblivious to whether or not they are on the cheapest deal with their energy provider. There are clear savings to be made by checking if your provider has a cheaper deal, and swapping to it. For example, an average customer on Scottish Power's standard dual fuel tariff can save £188 a year if they move to its Online Energy Saver 4 product. If they don't mind changing provider, they could save even more by moving to British Gas or Scottish & Southern's online products, which are the cheapest of all." "Our table [below] clearly shows why people should swap now," . "You don't wait in a rising market. Npower withdrew its excellent SOL8 tariff on December 17, meaning you could no longer apply for it. But those who were already on SOL8 are still enjoying those prices today. It is likely to be the same with Click Energy 4. Get on it now because British Gas may well withdraw the product soon."
www.moneysupermarket.com 7.1.08 Why hopes are pinned on the Energy Bill As rising energy prices squeeze household budgets and swell the numbers who can't afford to keep their home warm, campaign groups are urging the government to introduce a clause in this week's Energy Bill paving the way for low-cost energy for vulnerable households.
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