It's summer- should you fix your energy tariff and get insulation now?
For the next few days at least, most of the country seems to be basking in a glorious British summer period of non-raining, and at times like this, the last thing anyone is thinking about is energy prices. Anyone except the Bank of England that is, who have predicted that prices will rise again in January.
Now, you wouldn’t necessarily think the BoE had a lot to do with gas and electricity, being far too concerned with printing money quantitative easing and the like, but its prediction comes as its latest quarterly inflation report is published.
Reflecting on the effect of energy prices over the last quarter, and into the future, the BoE report, prepared by (presumably) some of the best economists in the country said that the “fall in gas prices has reduced the likelihood that domestic energy suppliers will increase their gas and electricity prices in the autumn. But continuing rises in the other costs that those suppliers face, such as those associated with distribution, are likely to result in small increases in domestic energy prices around the turn of the year.”
Call us cynical, but when British Gas are making £1.9m profit per day, and the BoE notes that gas prices have dropped by 9% since May, we can’t see how a price rise is justified. Still, the fact that such an influential organisation as the Bank of England are predicting it means that consumers should probably take notice. The energy companies surely will.
Commenting on the BoE prediction, Lucy Darch, energy expert at uSwitch.com, said: "This is very worrying news for consumers, and could set alarm bells ringing… With winter approaching, any further price hikes would put more pressure on many households, especially the third (32%) * already finding their current energy bill unaffordable. uSwitch have calculated that an average consumer has seen their household energy bills increase by 91% over the last six years, from £660 a year in 2006 to £1,259 in 2012.
So what can you do? While there is no guarantee prices will go up, this report does add weight to the possibility of an increase within the next year. If an increase could push your finances over the edge, you could consider tying yourself into a fixed contract such as the First Utility iSave Fixed V3** which is fixed till end of next year.
Remember also that the big energy providers are subject to hefty Carbon Emission Reduction Targets, which mean they have to try and help make homes more energy efficient, particularly difficult to reach groups of consumers*** or get fined. As a result, and until the CERTs expire in December 2012, there are various place you can get free cavity wall or loft insulation, and if you are on benefits, you can even get up to £200 cash/vouchers on top. You don’t even have to be a customer and the energy companies still offering free help include Tesco, British Gas, EDF and Scottish Power. Check out the details on their websites.
And enjoy the sunshine while it lasts.
*survey of 2235 people in September 2011
** cheapest deal according to uSwitch.com
*** not geographically difficult to reach. There are NO free insulation deals available in Northern Ireland and some deals exclude parts of Scotland.