Grim: a staggering 83% – or 22 million households – will be rationing their energy use this winter to save on bills
Looming price hikes have made almost eight in ten consumers (78%) more worried about their winter fuel bills
Price hikes announced to date will take bills to £1,434 a year – if other suppliers follow suit bills could easily hit £**1,500 a year at which 59% of households will be going without adequate heating and 36% will be forced to turn their heating off entirely**
Energy costs are the top household worry for consumers (90%) ahead of the rising cost of food (75%), petrol prices (66%) and council tax (49%)
Burnt out: four in ten (40%) households have been forced into debt to cover the cost of essential household bills – more than a fifth (21%) are worried about this debt
Big chill: almost seven in ten households (69%) went without heating at some point last winter to keep energy costs down – over a third (35%) said it had affected their quality of life or health.
Over eight in ten households (83%) – potentially 22 million – will be rationing their energy use this winter in an attempt to keep a lid on bills, according to new research from Uswitch.com, the independent price comparison and switching service.
Looming price hikes have added to consumer woes, making almost eight in ten (78%) more worried about their winter fuel bills this year. Such is the concern about affordability that energy costs are the top household worry for consumers (90%), ahead of the rising cost of food (75%), petrol prices (66%) and council tax (49%).
Worryingly, the average household bill following recent pricing announcements will soon hit £1,434 a year. This is just short of the £1,500 a year ‘tipping point’ at which 59% of households will be going without adequate heating and 36% will be forced to turn their heating off entirely.
The findings paint a grim picture of the affordability of energy today. Not only are growing numbers being forced to compromise on their quality of life, health or well-being, but a staggering 94% of consumers – 2% more than last year – have seen a reduction in their disposable income due to the rising cost of energy. Two in ten (20%) say they no longer have any disposable income left, while over a third (35%) blame the rising cost of energy for a dramatic reduction in their disposable income.
The escalating cost of living is also forcing people into debt with four in ten (40%) turning to credit cards, overdrafts, loans and other forms of borrowing in order to pay their essential household bills. Over a fifth (21%) are worried about this debt. In the struggle to pay bills, one in ten (13%) have gone into debt by more than £2,500.
With affordability such a big concern, consumers are already taking drastic steps. Last winter, seven in ten households (69%) – potentially 18 million – went without heating at some point to keep their energy costs down. Worryingly, over a third (35%) said that it had affected their quality of life or health. Now, with energy bills on the rise again, many more may be forced to go without adequate heat in order to afford their bills.
Ann Robinson, Director of Consumer Policy at Uswitch.com, says: “When it comes to affordable energy the country is at crisis point. Consumers are being forced to turn down and switch off in an attempt to shield themselves from the impact of higher fuel bills. This winter we will be seeing even more going without adequate heating for fear of racking up a bill they cannot afford – this is the grim reality for many households in Britain today. The Government has got to get competition working as this is the only way we will get to see fairer pricing, better service and people getting better deals.
“With four major suppliers having already announced price hikes, consumers face a perfect storm. Political hot air and rhetoric won’t heat homes – families have to take action and give themselves a price freeze instead. Rather than resorting to drastic and potentially harmful measures, I would urge them to ‘future-proof’ their energy bills this winter by signing up to one of the many competitive fixed price energy tariffs that are on the market. These don’t just offer a competitive price today, but can protect from price hikes for anything up to four winters too.
“Energy efficiency is also a key weapon – making sure that your home is insulated, draught-proof and using as little energy as possible will automatically help reduce your bills. Those who need help understanding what energy efficiency measures to introduce, or with financing it, should look at the Government’s Green Deal. These steps could make the difference in keeping warm this winter.”
Greg Barker, Energy and Climate Change Minister, says: “We are determined to do even more to help hard working people with the cost of rising energy bills. That is why we are going further than any government before in simplifying energy tariffs to enable consumers to switch to the best tariffs to suit their needs.
“This comes on top of moves to give Ofgem new powers to crack down on any rogue switching sites, and to ensure when energy suppliers break the rules, customers can now be directly compensated.”
Research in the notes below was conducted with the Uswitch.com Consumer Opinion Panel in September 2013 amongst 1,250 adults with bill paying responsibility for their household energy.
In response to: ‘Are you planning to cut back on the amount of energy you use this winter to make your bills cheaper?’ 51.3% said ‘I am already doing this’ and 31.2% said ‘Yes, I am planning to’. This adds up to 82.5%. Assuming that each person represents one household and on the basis of 26,442,096 million households in the UK we come to 21,814,729 households.
In response to: ‘Have rumours of a potential price increase by one of the big six energy companies made you more worried about your winter energy bills?’ 77.9% said ‘yes’, 18.1% said ‘No’. 4% don’t know. NB SSE has subsequently announced a price hike coming into effect 15th November, 2013.
Following SSE, British Gas and npower announcements - based on a medium user customer using 16,500 kWh gas and 3,300 kWh electricity, paying quarterly on receipt of bill with bill sizes averaged across the big six suppliers and across all regions.
Research carried out in September 2011 with the Uswitch.com Consumer Opinion Panel amongst 2,295 adults with bill paying responsibility for gas and electricity in their household. The £1,500 affordability tipping point is determined in two ways. Firstly, this is the point at which more than half of consumers (59%) believe energy will become unaffordable (‘At what point will energy become unaffordable in the UK?’) Secondly, £1,500 is also the point at which there is a marked difference in consumer behaviour. This is based on responses to the following question: ‘Following recent price increases, the average household energy bill is now over £1,200 a year. How much would your yearly energy bill have to be before you would consider the following actions….’)
In response to: ‘Thinking of the rising cost of living, which FOUR of the following worry you THE MOST?’, the responses were: energy bills 89.6%, food bills 74.7%, petrol 65.5%, council tax 49.1%, mortgage/rent payments 37.6%, insurance 25.7%, phone/broadband bills 18.5%, public transport fares 9.8%, and I am not worried 4.2%
In response to: ‘Thinking about day to day living costs such as essential bills, which of the following best describes your situation? For debt we mean paying on credit card, using overdraft, taking out a bank loan, borrowing from friends and family, etc’, 21% answered ‘I’m in debt and I’m worried about it’ and 18.9% answered ‘I’m in debt but I’m not too concerned’. These add up to 39.9% in debt.
Research conducted with the Uswitch.com Opinion Panel amongst 2,099 respondents in January 2013. In response to: ‘Have you gone without heating this winter to keep energy costs down?’ 31.2% said never, 50.6% said occasionally, 16.5% said regularly and 1.7% said always. This adds up to 68.8% who went without heating at some point. Assuming that each person represents one household and on the basis of 26,442,096 million households in the UK we estimate that 18,192,162 households went cold at some point last winter.
Research conducted with the Uswitch.com Opinion Panel amongst 2,099 respondents in January 2013. In response to: ‘Do you think you’re achieving the right balance this winter between keeping your home warm and managing costs?’ 34.9% said ‘No – the cut backs I’m making are affecting my quality of life and/or health’.
When asked: ‘What impact has the rising cost of energy had on your household’s disposable income? By disposable income we mean what you have left to live on after paying taxes and essential bills’. 19.9% said ‘We no longer have any disposable income’, 34.8% said ‘It has reduced our disposable income dramatically’ and 38.8% said ‘It has reduced our disposable income slightly’. These add up to 93.5%. Last year’s figure added up to 91.7%.
When those in debt due to bills (see point 6 above) were asked: ‘How much do you estimate you have gone into debt in total as a result of paying your essential household bills?’ 2.4% answered ‘£2,501 - £3,000’ and 11% answered ‘£3,000 +’. The combination of these figures adds up to 13.4%.
It’s all about “U”!
Thank you for indulging us over the last 20 years by using a small ‘u’ and a big ‘S’ when writing about our brand in your articles.
We are delighted to let you know that you are now off the hook - it’s big U’s all the way (and small s’s) as we undertake our biggest ever rebrand - so let your autocorrect go wild!
Uswitch is the UK’s top comparison website for home services switching. Launched in September 2000, we help consumers save money on their gas, electricity, broadband, mobile, TV, and financial services products and get more of what matters to them. Last year we saved consumers over £373 million on their energy bills alone.
Uswitch is part of RVU, a new business that also owns Money.co.uk and Bankrate.
If you would no longer like to receive our press releases please email prteam@uswitch.com with 'unsubscribe'.