Cold spell puts gas and electric under scrutiny

22 February 2010 09:43:58

Freezing temperatures leave consumers struggling.

The issue of switching gas and electric providers has been given greater prominence in light of the severe wintry conditions of the last few weeks.

With a survey conducted by Which? showing that the cold weather has left people up and down the country worrying about their ability to pay their energy bills, the importance of comparing prices and securing the best available deal is now greater than ever.

Who is affected?

According to research conducted by Shelter, millions of people in the UK are being forced to make the choice between having a warm home and making ends meet. The impact of heating a property in the current cold snap is such that many homeowners are having to put limits on their energy consumption in order to pay for other costs. A survey conducted by the charity suggests that as many as 27% of consumers (equivalent to around 11.7 million people) are having to spend less on fuel bills to cover their mortgage or rent expenditure. This indicates that the average wage may no longer be sufficient to pay for the most basic necessities.

Falling into debt

A separate study conducted by Ofgem paints a similar picture, with many people apparently being plunged into debt as a result of their determination to keep their families warm. The electricity and gas market regulator discovered that, by September 2009, an extra 300,000 people had fallen behind on their gas and electricity bills compared with the equivalent figure for 2008, leaving UK households a collective £630m in debt. Furthermore, this figure is expected to rise significantly, with the Which? survey showing 38% of consumers were worried about their ability to pay their energy bill for January. In some cases, bills have only been paid after parents have raided their children's savings accounts, while others have resorted to wearing additional layers of clothing in order to keep heating bills down to an absolute minimum.

Why switch provider?

However, with Which? statistics showing 65% of consumers are now thinking more about their energy bills in light of the cold snap, there should be significant motivation to act and switch providers. As well as being simple, this course of action can lead to significant savings being made, thereby helping to remove some of the burden from bill-payers. For instance, consumers using CompareAndSave.com's gas and electricity comparison tool in January made an average saving of £281.27, while the maximum saving was £644.34.

Both dual and single fuel customer searches proved effective. Specifically, the average dual fuel customer was able to contemplate a saving of £302.91 in January by using CompareAndSave’s service, with a maximum saving of £644.34. The average single fuel customer, on the other hand, would have been in line for a £165.81 cost reduction and a maximum saving of £246.15.

As a result, while gas and electric bills are unlikely to fall significantly in the near future, consumers can at least make an impact by ensuring they have the most appropriate package in place.

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