14 percent of British households are in debt to energy firms by £478 million

A new study out today is suggesting that still there is a vast amount of British households, almost four million in fact that are in debt to their energy suppliers, with said consumers owing an estimated £478 million to the energy companies.

Energy comparison website uSwitch carried out a poll in which it identified that 14% of homes are in debt to their energy supplier, remarkably which is down from 19% last year.

However it’s not all good news as the average debt is now higher than it was in 2011, standing at £131 – a 4% increase.

The annual study also found by taking these figures and comparing to early years showed that the amount currently owed is some 15% higher than in 2008, therefore reflecting the 53% hike in prices since then.

Ann Robinson director of consumer policy for uSwitch said: “With households still struggling to absorb last year’s price hikes, energy debt is on the rise again.

“As a result consumers will continue to struggle to pay their bills and debt will continue to grow.”
Average energy bills have gone up by 17% in the past and a third of those in debt owe more than they did a year ago, and now stands at £183.

As many households worry over their mounting debt has seen 9% of the householders to agree a repayment plan with their energy supplier, with a further 3% households expected to move onto a prepayment meter – which is 1% up on last year figures.

Although many energy suppliers have reduced their prices this year, the average reduction of £41 – or 3.2% is nowhere near the average increase in energy bills seen since the end of 2010.

A staggering 99% of the UK energy market is controlled by what’s termed as the UK’s six big energy suppliers who are British Gas, EDR, Eon, Npower, Scottish Power Business, Southern and Electric.

uSwitch’s Ann Robinson continued by saying “Those in energy debt can face a catch-22. Despite knowing they could reduce their bills by moving to a cheaper energy plan, consumers can see debt as a barrier to switching.”

“However, our research shows that while the average debt is £131, consumers could save up to £420 just by switching.

“So while they may have to pay any outstanding debt to switch, by cutting the cost of their energy they could avoid falling back in to debt in the future.”

So be simply smart with your money and look to squash your energy bills today

Small businesses in the United Kingdom need to be part of the Green Deal

According to recent reports only 21% of small businesses have any form of money saving energy equipment installed within their workplace – if correct; this means that a staggering 4 million small businesses within the UK are just simply wasting money.

Eon, who conducted the report in question, highlighted the fact that 79% of UK small businesses are losing nearly £2,000 a year by not implementing energy saving measures. This will no doubt be seen as a worrying trend as predictions are that energy prices will continue to rise over the next 10 years.

It does kind of make you ask the question as to WHY many of the 4 million small businesses are not taking any action either now or in the past.

Many of us will of course heard about the Green Deal which is due to be fully launched in October 2012 – whereby the aim of the scheme is to insulate 14 million homes within 8 years, which could be seen as a quite ambitious project.
 
The Green Deal scheme was initiated by the Coalition Government who has said that the UK has the most poorly insulated houses therefore leaking heat, and as a consequence this is one of the reasons why consumers in the United Kingdom pay a high price on their energy bills. Another fact is that the UK’s poorly insulated houses are contributing towards 24% of the UK’s overall Co2 emissions every year and a proactive and workable plan needs to be put into place to reduce our Co2 wastage.

The Governmental target to reduce carbon emissions by 34% by 2020 and then by 80% by 2050 is going to be difficult as most residential dwellings that produce carbon emissions will not be replaced or reconstructed in an energy efficient way – so the Green Deal scheme is seen as the best way forward to help.

Let’s not forget that the UK also has many factories and offices who contribute 18% of Co2 emissions do not fall within the current Green Deal Plan – so surly it would be fool hardy not to include commercial businesses in the project in some way shape or form.

Reports also suggest that 86% of workplaces currently do not have lighting timers or motion sensors in their buildings. A possible reason for this being that many businesses do not know where to turn to get advice or information – Perhaps potential strong reasoning and argument for rolling out help and advice with the introduction of the Green Deal for businesses.

The plan to get businesses involved has been provisionally agreed by ministers although it it’s not envisaged to be released by October 2012 – the plan would work the same as businesses based on the “Golden Rule” which is as follows;

1) Bill payers will be able to get energy efficiency improvements without having to pay upfront
2) Businesses will provide the capital, getting their money back via the energy bill
3) The estimated savings on bills will always exceed or equal the cost of the work

A business would receive up to £10,000 to insulate their properties and at this stage it could be
possible for businesses to receive grants for Green Technologies, but this has yet to be confirmed.

Confusing Gas and Electric tariffs

Whilst having conversations with both residents and businesses about squashing their energy bills, conversation always turns to how expensive both home and business energy is – we often find that people know that there are cheaper utility providers available but somehow they feel that it is difficult to find who is generally offering the best energy option.

It would seem their view is that often the Big 6 energy suppliers and even smaller energy companies continually offer confusing gas and electric tariffs.

Back in October 2011 we reported that Ofgem were being told going to get a grip and address energy price increases and start tackling head on the often complicated tariffs which are being offered to householders and businesses who are looking to save money on their utility energy bills.

So Ofgems plans for simpler understandable utility bills has found a lot of favour with consumers who when tested found it easy to identify the cheapest utility provider when offered a single unit price for a household.

Ofgem contacted 2,000 people in a survey and the results of their research found that 70 percent of those surveyed said they would switch their utility energy provider if their gas and electricity bills were made easier to understand.

The results of the survey also found that confusing tariffs make householders who want to look to switch their utility provider unsure about who is offering the best saving on their gas and electricity bills and as a result stay on what would be considered to be an expensive tariff, when a switch to another supplier would save money on their energy bills if only they could understand clearly how much they would save.

The proposals that Ofgem are suggesting to simplify the residential energy market are:

• Set the standing charge price for all energy providers
• Gas and Electricity bills should have one tariff
• Energy companies should have one standard tariff for all of their payment methods whether it is direct debit , cheque or cash payments

The plans to implement changes to the residential utility market are likely to take place in 2012 and Alistair Buchannan CEO of Ofgem said that “encouragingly it is good to see major energy companies such as British Gas, Eon and SSE are recognising the problems and they are looking at producing simple understandable utility bills.”

Are the government going to change their mind on solar energy?

The recent decision made by the government to effectively halve the subsidies as from the 12th December 2011 which a consumer or business receives from having solar panels installed is being challenged today (21st December 2011).

Friends of the Earth are putting pressure on the government to seek a suitable alterative ruling as the environmental charity believes that the proposals which the government recently introduced is in their view unlawful.

The new lesser 21p per kilowatt hour tariff was originally going to be introduced to take effect from April 2012, but quite suddenly the government decided in their infinite wisdom that they would bring forward the introduction of the new tariff to 12th December 2011.

‘Solar Century’ and ‘Home Sun’ two Solar Energy providers based in the United Kingdom also challenged the decision and have said that it has now put the Solar Energy Industry at risk. Already projects have been scrapped and some solar energy companies have been forced to make staff redundant and worry for their long term future as Solar Energy Installers.

Andy Atkins of the Friends of the Earth said “we are delighted that the High Court has given the go ahead to our legal challenge.”

“Ministers must change direction and put the solar industry at the forefront of building a clean and safe future.”

In Scotland about 3,000 jobs had been created in the Green Energy market according to Peter Randall of the solar trade Association but the change to feeder tariffs which came into effect on the 21st December 2011 has put a third of these jobs at risk.

Chris Huhne the Energy Secretary, made the decision as he felt that the 43p tariff which Solar Energy customers receive by selling energy back to the National Grid is to generous and can’t be sustained long term.

Local councils have already criticised the decision with Stoke on Trent City Council already reducing the amount of council building(s) which they were intending to install solar panels on from 4,000 buildings to 550 buildings.

The scheme with Eon was intended to save Stoke on Trent City Council home rent payers about £100 on their electricity bills but the decision on reduction has now been scaled back to Council House buildings only.

Fuel poverty and how it needs to be squashed

The amount of homes which are in fuel poverty in these modern times has risen over the last 24 months by a staggering 6 percent; the figures from the Consumer Focus report do make worrying reading.

Within its report Consumer Focus has calculated that the amount of homes where 10 percent of the income of the said household is spent on Gas and Electricity has risen to 5.7 million homes in the United Kingdom.

The worst area has been reported as Wales where 41% of all households are in fuel poverty, the Welsh government has taken action with £60 million investment into improving energy efficiency in Wales. The programme includes advice on debt as well as how to claim for suitable and appropriate benefit if they are entitled.

“The increases in the price of Gas and Electricity prices has pushed even more people into fuel poverty” said a spokesman from Consumer Focus, the worry is that there are large sections of consumers who have never attempted to save money on their utility bills by switching appliances off or by taking what would be considered to be very basic measures such as insulating the house

A spokeswoman from the Department of Energy and Climate change said that “the answer is to educate people to use less energy. “

House holders are under extra pressure to save money on their utility bills; the problem in the United Kingdom compared to other countries in Europe the is that a lot of houses which have been built over the last century have never really has any proper insulation fitted and houses in the United Kingdom are less energy efficient.

We have mentioned before that if you are having problems paying your Gas and Electricity bills then the first action is to get in touch with your utility supplier – They may be able to help you save money on your utility bills by working out a payment plan.

It is now estimated that an average house will spend about £1,300 per year on their home energy costs, this figure is based on a semi detached house with three bedrooms – when you consider that only 5 years ago the figure was £970 it is a sharp rise.

The need to look for a better deal after first contacting your existing utility provider has never been more apparent than it is now – on average households can save in the region of £200 plus on their home energy bills – so the right way forward for many households is by them being simply smart and switching their utility supplier.

If you’re a household have a look here to see what saving you can make, if you’re a business no need for you to feel left out and we can help you also squash your monthly business utility bills.

Always check your energy renewal does not rollover and kill you

It has been reported recently that Ofgem are looking to make it easier for companies to change their Gas and Electricity suppliers, good news for businesses that can get caught up in long expensive contracts which could be avoided if they make sure that they cancel their business energy contracts in the renewable period.

Ofgem the energy regulator is also going to be looking into the whole process involving roll over contracts with a view to looking at and implementing measures to stop energy companies preventing businesses form switching supplier.

A business energy contract will normally last from 12 months up to 60 months and will include within the terms and conditions of the contract the date when a customer can either renew their contract or move to a different supplier.

Its currently standard practice that during the renewal period a business will be sent a renewal price by their current energy supplier to enable them to continue the their current contract however the problem happens when the customer forgets or overlooks the termination period and finds out that they are often automatically signed onto a business utility contract because of rollover, which could be in a majority of circumstances be more expensive – because of rollover they are then tied in and unable to find a better business utility price from the whole of the utility market.

The business energy market can be very volatile and to guarantee the best service you need to plan ahead and remember that it takes 6 weeks to change supplier and the range of tariffs within the market is numerous the need to get simply smart with your business energy and get the best deal for the current period of time is never more needed than in this current climate.

The biggest problem according to Ofgem is that businesses need to get a clear warning when their contracts are going to end and clear instructions on finding a new supplier. The timescale which this is looking to be implemented is late 2012 so until then all businesses still need to be aware of their end date which can be sent on a bill which can be overlooked.

The Solar Panel Feed in Tariff has been reduce by half

The government have reduced the amount of Tax Free income which can be earned by consumers who have purchased Solar Panels and opting into the Feed in Tariff Scheme otherwise known as (FIT)

Consumers have been turning to solar energy as a way of saving money on their energy bills as well as considering other benefits from solar energy such as being a good way to earn money to possibly put away for future retirement plans.  

The FIT Scheme currently pays an income of 43.3P Tax Free but it that could be reduced by half if a purchase of solar panels is made after 12th December 2011.

To understand what this means and why the Solar Panel companies are up in arms you have to understand how the Feed in Tariffs provide an income to households and businesses.

The Fit Scheme was introduced back in 2010 to encourage the United Kingdom to produce more clean energy for our energy needs and for the National Grid.

Clean energy is also known as renewable energy and is energy which comes from sunlight, wind and rain. The government hopes that by 2020 we will be producing 15% of energy from renewable sources.

The Feed in Tariffs provide a Tax Free Scheme for those customers who have solar panels fitted on to their business or residential property for which they get paid (tax free) for the energy which produced via the panels as well as benefit directly from free energy themselves.

Points to note are:

• The consumer gets paid through a “generation tariff”, which is a direct tariff from the energy supplier. The amount the consumer gets paid will be 43.3 p but as mentioned earlier it will reduce by half if the energy panels are not registered and installed by 12th December.

• In addition to the “generation tariff” there is the “export tariff” where a solar energy customer can also earn money by receiving a payment from the energy supplier for the energy they do not use; this pays the solar panel customer an extra 3p. The concept around the “export tariff” does sound a bit strange but an example is, if you have a hot day the solar panels will store more energy than you can use and because you can’t save the energy for a later date it is sold back to the national grid.

The reaction from solar energy companies has been quite outspoken and in many cases very some are angry and worried as to the effect that the reduction in the FIT will have on the Solar Energy industry. The introduction of the FIT scheme 2010 had reportedly credited 25,000 jobs and set up 3000 new enterprises.

The biggest blow would be to companies that offer solar panels for free to businesses and residential consumers.

The solar panel firms earn the money from the “generation tariff” and the consumer gets their bills reduced by approximately £90 to £180 a year. So with such a dramatic reduction from 43.3p to 21p many feel that a lot of Solar Energy companies will disappear as the free solar panel offering which they provide would simply not be cost effective enough to continue and with a 50% drop in earnings most companies not just solar panel companies would find it hard to survive.

The news of the TIF reduction is also not good news for people who can’t afford to pay out for panels as they will lose the chance to save money on their utility bills and it could become a case of being only the people with higher incomes who will benefit from solar energy in the future.

Complaints about water companies are getting lower

Water companies have taken a lot of criticism in the past for poor service.  However, Ofwat (The Water Services Regulation Authority) have recently reported that complaints in the United Kingdom have fallen.

The reason highlighted for consumers complaining is mainly due to the fact that they feel that they are paying for the mistakes which are being made by the water supply companies, mistakes which push the water pricing higher.

Hence a lot of water customers are now tending to see if they can get a better service as well as save money on their water bills.

Whilst the news that complaints have fallen over the last 12 months may be good news for the water companies, they still need to do more to maintain the infrastructure and address issues of the water supply, maintenance and most importantly the vast amount of leaks that are occurring in towns and cities all around Britain – all of which need to be improved according to Ofwat.

Ofwat looks at all 21 Water companies which operate within the United Kingdom and the report in June showed that water suppliers such as Anglian, Welsh Water , Northumbrian – north east operating  area , Severn Trent , Southern and Yorkshire had failed in meeting the targets which had been set  by them by the water regulator.

Those companies who had not met their leakage targets were being told that they would be fined.

Regina Finn the CEO of Ofwat (The Water Services Regulation Authority) said “Companies will be paying out around £38 million from their own pockets to fix the problems which were either not addressed previously or which had been spoken about in missing the targets set for them”.

Apart from recent the problems with leakage; 7 companies were alerted to problems with not maintaining the underground structure correctly which also in turn would prevent leaks, the water companies namely United Utilities, Northumbrian, Southern, Veolia Water Central, along with Severn Trent, Anglian and Welsh Water, have all been told to improve the service to the water supply and their customers.

Ofgem are told to get a grip and address energy price increases.

As we prepare for a possible long and cold winter by stocking up on extra blankets, hot water bottles and sleeping bags – the was suggestion yesterday was that the energy regulator Ofgem (Office of Gas and Electricity Markets), should be slammed for appearing to allow energy companies rip off their customers.

The big six energy companies:- British Gas, EDF, npower, Scottish Power, Scottish & Southern and E.ON have all raised their prices this autumn, which is effectively resulting in each UK household having to pay about £300 more for fuel this year.

Of late the cost for raw gas and electricity has fallen, yet some energy firms have increased their bills by almost 20%, such actions is prompting suspicion that they are all colluding together to keep prices high which in turn is continually forcing UK businesses to reduce their utility energy costs, and UK households to look for Squashed Utility Bills.

Criticism has been tabled towards Ofgem by Labour MP John Robertson, of the Commons Energy and Climate Change select committee – in them failing to use their power and authority in being able to fine energy companies. Energy Secretary Chris Huhne has also admitted signs of “anti-competitive behaviour” and ordered that Ofgem “get a grip on it”.

Mr Robertson expanded in saying: “Ofgem has the power to impose a maximum financial penalty of 10% of turnover on any energy company it believes is acting anti-competitively.

“So why has it not imposed this 10% penalty? In a rough estimate, if it imposed this penalty on only British Gas, whose revenue was £22billion last year, it could have raised £2billlion, which could have been passed on to customers this winter.”

The stark reality is that if all the big six energy companies were fined at the same rate, an estimated £9billion would be clawed back.

Mr Robertson went on to say: “We have a regulator that refuses to bare its teeth to punish companies that are treating customers like serfs.”

“These companies are pinching money out the pockets of the poorest people at a time when snow is about to fall.”

National Grid earlier this year received a fine of £8million from Ofgem as did British Gas for £2.5million for breaching regulations.

In breaking the law on gas meter contracts, National Grid in 2008 suffered the highest penalty ever imposed by Ofgem (Office of Gas and Electricity Markets) totalling £15million.

Estimated energy bills now may catch you out later.

As we are now entering into the final quarter of 2011, the amount of electricity and gas we use in order to try and stay warm and dry will increase. Many of us will of course want to look for the cheapest options and we’ll wish to either look at switching utility suppliers or we may wish to stay with our current energy supplier on the same or a better tariff – either way there are things which we need to consider.

Most utility companies will set their payment schedule on either a monthly or quarterly payment plan along with estimated readings being used a majority of the time in the production of our Gas and Electricity bill statements. This applies to both household utilities as well as business utilities.

With news that the bills are going to increase significantly with the likes of British Gas, EDF, npower, ­Scottish Power, Scottish & Southern and E.ON having all raised their prices this autumn, making each household pay £300 more for fuel this year. There is a real possibility that UK households and UK businesses alike could build up a huge deficit if we don’t give our exact meter readings to your Gas and Electric supplier on a regular basis.

Estimated energy bills can cause problems if not now most certainly in the future and as such can and will affect people’s ability to squash their residential and business energy costs. An example being if a deficit of any kind is present large or small it will need to cleared before being able to switch to a different utility supplier.

For those households and businesses that opt to pay a fixed amount per month via direct debit will find that their current energy provider along with all other utility companies will base the monthly payments required on historical data.

Often this means that paying a fix monthly amount on estimated bills over a 12 month period could result in such estimate readings being  for less energy than what it actually used – hence either at the end of the year or when looking to change energy supplier there’s a stonking large bill to settle first.

Without rambling on here or stating the obvious – but in a genuine effort to force home what we’re saying: – if the reading on your estimated bill is saying you need to pay £50.00 a month but you are actually using £90.00 a month, of course a deficit will build up over a period of time. Unless you’re emailing, phoning, or texting your energy supplier regularly (monthly is always best) with your gas and / or electricity meter readings – the bills produced will be estimated.

DO NOT RELEY ON YOUR ENERGY COMPANY TO COME AND READ YOU METERS AS THIS WILL ONLY HAPPEN ONCE OR TWICE A YEAR.

The first warning signs that you are starting to struggle with payments may be that you are relying on estimated utility bills and the thought of giving a current reading causes you concern and sleepless nights.

In our opinion and to be simply smart with your energy costs you need to talk to your Gas and Electricity supplier if you feel that you may not be able to pay the current bills – Do not stick your head in the sand and hope it will just go away, or sort itself out on its own accord.

Take note that if you find yourself in an awkward position, your energy provider is able to offer alternatives such as a budget plan or payment plan. We would suggest writing or emailing your utility company and explain your situation, as this is the best way to prove you’re trying to address the situation. The utility company should offer a compromise and help you through for a period of time so you can start maintaining your payments.

In summary, as with all financial payment obligations you may have – if you discover you are having problems making such payments you MUST get in touch with your creditor as soon as possible. If you feel that the problem is more than just your utility bills it may be time to have a look at what your budget is with regards to income and the money going out of the household by using an Personal Budget Plan.