Thursday, February 5, 2009
Category:
Personal Finance Tips
Millions of UK households have had to increase their energy consumption as a result of the recent cold spell.
This, combined with months of escalating gas prices and freezing temperatures, has prompted Confused.com’s head of energy, Gareth Kloet, to offer some advice to domestic customers.
Firstly, start budgeting. Setting money aside for that next energy bill is recommended, particularly as the cost of energy rose by an average of 40 percent last year. Upon receipt of the energy bill it should then be dealt with right away, by means of immediate payment or by agreeing an arrangement to pay. Ignoring bills is not a sensible option, even when the required money is not to hand. Suppliers can spread arrears via a new payment arrangement, which could allow the consumer to make a series of repayments. This is generally preferable to the alternative – a potentially difficult recovery process involving reminder notices, which may culminate in a court summons.
Secondly, switch to a more practical payment method. Direct debit payments can aid budgeting thanks to the money coming straight out of the bank account, and some suppliers even offer discounts for using this method of payment. Payments can either be fixed, spreading the anticipated annual bill over a period of twelve months, or on a variable, quarterly basis.
Thirdly, keep up-to-date. It is worth-while finding out more about energy efficiency as this could ultimately save you money. Finally, shop around. According to Confused.com, despite increasing energy costs, there was no such rise in the number of people switching from one supplier, or tariff, to another. Last year, 20 percent of consumers reviewed their energy supplier, and 18 percent the year before. This is surprising bearing in mind that those consumers who have never switched could save an annual average of £240 by doing so. There are 14,000 tariffs on offer so it may not even be necessary to switch suppliers in order to get a better deal.
Kloet commented: "For the millions of people who have a bank account, it is wise to pay energy bills by direct debit, at the very least. As well as the discounts that apply, it will ensure that customers never miss payments, and will help them plan for that shocking winter bill - the impact of which will have been heightened by time off over Christmas and freezing weather conditions. However, as discounts vary, depending on the supplier and tariff, it is always wise to shop around for the best tariff for consumers' particular needs. Comparison sites enable consumers to search for the most comprehensive tariffs on the market, with quotes delivered in a matter of minutes."
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In an effort to make energy-savings, homeowners may wish to consider carrying out some home improvements to protect against future cold spells. One of many options available to fund
home improvements, a secured loan could finance large scale projects such as replacing the roof on a property. Alternative methods of protecting homes from the winter weather could include insulating the loft space and re-doing guttering to ensure that water is diverted away from the property properly. Some homeowners may even decide upon replacing windows and doors in order to retain heat more effectively. All of the aforementioned projects could be funded by means of a secured loan, which is usually repayable over a term to suit the borrower from 5 to 25 years.
