British Gas ...... 18% rise announced! How will people cope?
| Related: | Personal Finance•Utilities•Gas |
Yes, this hit the news this week and British Gas defended the price increase on the basis that worldwide wholesale prices are rising by 30%.
They were interviewing people ( on the TV ) about this issue and there was clear reaction and concern that people, ( from all ages and walks of life ) were thinking about food first and energy costs second. Some were even saying that the new tariff would put their gas cost alone at 25% of disposable income. And I suspect that as people go more into debt with their energy bills, again the companies will raise prices to compensate.
Can anyone explain why world wholesale prices are soaring? Is it an issue of availability, production costs or simply sheer greed? This will mean that heating your home will soon become a luxury and not a simple basic requirement. Some can cope but most, I suspect , will not be able to.
It was further announced that all energy companies will follow suit in the price increase, after all gas is gas. The government has made the usual weak and fruitless response in that 'they want to see more energy providers to stoke up competition'. How will that help when wholesale prices are soaring?
And will this also raise the pricing profile of all utility providers? Electricity is bound to soar in response and we we speak we see the water companies plotting their next move. If local authorities can strive to freeze or limit their council tax prices, why is there absolutely no moderation on every other vital commodity in a world that appears to be going slowly bankrupt? Or is that just the exact point ... the price hikes are just desperate measures to keep afloat?
Responses (5)
It is high time the government intervened, I appreciate that these are corporate buisnesses who are responsible to shareholders but when one energy company announces hikes the others all follow suit, where is the competition to be had in this market?
The aim behind privatisation was to create more competition in the energy market and what we have is less because they all fix their prices, in my opinion, this borders on a cartel approach and it is now time to challenge the stranglehold these companies have on the consumer.
Sod them! Renationalise the energy industry!!
Definitely under that duvet again Snoopy plus bed socks, long johns and bed jackets. Also lovely fluffy slippers if it takes your fancy
Quite simply, Snoops, many won't cope. A necessity has become a luxury that less and less people can afford!
I totally agree with Parchester here, the energy industry needs to be sorted out...fast!
I think British Gas's theme tune ought to be .......
"I've got my love to keep me warm" ( Irving Berlin, 1937 ).
That's obviously the answer ... get a woman in before the big chill!
I have nothing but complete contempt for the energy cartels. It is no wonder that some tenants just move from house to house and flat to flat leaving behind their hefty bills. I do not condone their actions but the energy should NOT be allowed to get away with bill murder from their OFGEM friends who are NEVER there to serve customers'concerns but only pretend to act in our interests. Once in a while they will give a "gesture" fine to make us think that they are on our side.However, that fine is usually already covered by the price hikes heaped on vulnerable customers.
People dodging their bills in the first place also lead to increases in prices which then leads to more people running from their bills and the cycle continues. I hate to say it, but the mindset of many consumer's is the problem. The number of people that think their credit card payments are the highest priority each month just highlights how the vast majority of households are living their lives up-side down when it comes to financial priorities - but once you hit that cycle of needing the card to live off, well the only way to get off the cycle is often to cut the card up and take the hit on your credit rating. The same thing is happening with energy in affect, people dodge one bill and get used to it. Then they start to take the biscuit, not worrying about leaving the TV and lights on and running up the bills before doing a runner again - increasing everybody elses bills.
Debt collection agencies biggest contracts come from energy companies as opposed to the banking industry - how have things got this bad?
I agree with much of what you say, Hetley, but I would be very interested to see the statistics for how much money energy companies lose on customers defaulting, compared with how much they spend on shareholders' dividends.
A lot of the defaulters must surely be pensioners and other vulnerable people on fixed incomes who just can't cut their expenditure any more
Pensioners tend to be the more up-to-date consumers due to the fact that they know their energy is a priority - there was an article recently about pensioners cutting back on food to prioritise their energy bills.
The people who tend to be in arrears with their G & E tend to be families with properties in negative equity (I.e. they were able to take on a mortgage for a property that they couldn't afford to live in - hence the high LTV when bought)
And those who have either done a runner or aren't making an attempt to clear the arrears tend to be young single mums and young couples.
I spoke to a couple only a few months ago who had only £8k debt - £7k of it was made up of utility arrears from their last three peoperties. We ask for a background story from all clients and this couples story for the debt was that their utility providers from the last 3 properties had 'found' them...
Well this is the research we found anyway, people tend to be in trouble by the time they realise they need to contact someone like us.
Thanks, Hetley, I hadn't realised you actually worked in this area, so your comments are valuable. I was making the mistake of making assumtions!
No problem, we work with people struggling with finances across the board, setting up debt plans etc... as well as offering a money optimising team that helps clients cut their household bills - allowing them to offer more to their debts to clear them sooner.
To be honest Feline, i think its perfectly fair to assume that 90% of the population are struggling at the moment... and things are hardly getting easier =[
Might well get worse before they get better, Hetley.
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Oh my .. Parchester ... it so good to have someone like you on this forum who always brings a sense of realism to the points raised and a great 'black and white' and totally intelligent response to boot! Excellent thoughts .. thank you!
Aw bless you Snoopy48! I'm a great admirer of your work too!
Looks as if we have a Brotherhood starting up in competition with the Siaterhood!
The Money Brotherhood sounds like a sinister Cosa Nostra organisation, be afraid, be very afraid!!
Eek, Parchester! :-)