Heating Your Home: Key Issues
The issue of home heating has really been hitting the headlines here in the UK. There are, for instance, suggestions that the private utility companies may be making excessive profits from consumers.
A report in the Guardian newspaper is fairly typical, suggesting that the amount of profit that's being made (per customer) has increased by an astounding 733% in the space of a few months. In effect, the average profit per customer has risen to £125, from £25, for dual-fuel customers.
This may come as a surprise to some consumers, although it may appear disappointingly familiar to many others.
Ever since this sector saw the introduction of privatisation, there have been fears that the private companies might seek to take too much in terms of profits.
So how should we look to respond to these issues? Relying on government and the regulators might be one particular approach, although there's a worry here, with limited activity seeming to be evident.
At a time when so many households are having to watch their budgets squeezed - with inflationary pressures and concerns about job security thrown into the financial mix - there appears to be a lack of re-assurance.
Ofgem, the regulator in this case, reports that consumers are now facing bills of around £1,345 per annum. For many, this may well outweigh their Council Tax payments. Although Ofgem are threatening to formally report the situation to the Competition Commission, action can't come soon enough for consumers.
The government are suggesting that tariffs need to become clearer. It's certainly difficult to identify the cheapest deal and many are left worrying about the lack of transparency. It should be simple to compare deals, yet it remains incredibly difficult. For those without easy access to the Internet, there's limited opportunity to research the various options.
Taking matters into your own hands
Consumers are left in a difficult position here. Relying on action from the authorities may be fruitless, at least in the short-term. Instead, it may be necessary to take a more pro-active approach.
Finding the cheapest deal is obviously a good start, but things are by no means easy. As suggested above, the complete lack of transparency makes things difficult here. How can you be sure that you're getting the best deal?
Some of the energy companies offer fixed rate deals, with prices being set for a period of 12 months (or more). These often look more expensive at the outset, but can be more cost-effective over time. The variable rate deals are often prone to rapid change.
The problem is that the current system appears to require all of us to become energy experts. There's an expectation that we'll be able to predict future changes in price.
Since few of us have the time to look at energy prices, or the strategic decisions that are taken by these companies, this is not at all simple. You're simply left to do the best that you can.
Energy efficiency
One thing that you can control to a much greater extent is the amount of energy that you're using. It's perfectly possible to make some changes here that can save you money.
Energy efficiency isn't something that's only of interest to environmental groups. The truth is that there are clear financial advantages attached to taking "green" decisions.
By reducing your energy consumption, it's clearly possible to ensure that you spend less. So, is energy efficiency a route that's available to your family? In the second of our special reports, we take a look at energy efficiency and what it means in terms of heating your home.
