COMMENT
How To Guard Against Rising Energy Bills

There can't be many of us who have failed to hear of the imminent price rises expected to be implemented by gas and electricity companies.

Powergen has recently warned that it would be raising prices for its gas and electricity from the end of next month (gas prices by 11.9%; electricity by 7.2%). Centrica warned last month that it too expected a double-digit rise in prices at its subsidiary, British Gas. And other companies are set to follow suit.

Unfortunately, with wholesale prices for both gas and electricity at historically high levels, we can safely assume that these price rises are here to stay. And although these price hikes for most of us are simply annoying, for some it can lead to what's known as fuel poverty, which can and does kill. Fuel poverty is experienced by anyone who spends more than 10% of his or her income keeping warm. A report from gas and electricity watchdog Energywatch has highlighted the fact that the huge price hikes seen in 2004 (21% for Gas and 18% for electricity) has meant more people are struggling to pay their bills, and imminent price rises could condemn as many as 400,000 back to living in fuel poverty.

The Energy Smart campaign, which is sponsored by community groups, public bodies and Energywatch, advises consumers to:

1. Switch supplier
2. Change payment method
3. Be more energy efficient

Switching supplier is easy, and up to £170 could be saved each year simply by using a service such as that offered in our Get Out Of Debt centre. Additionally, TheEnergyShop believes that the 40% of us who currently pay our bills each month by direct debit are likely to have a surplus with our provider by the end of the summer, due to fuel consumption in the summer being less than winter. This surplus would of course be used up in the winter, but moving supplier would mean that apart from saving money we could get our hands on this cash, on average worth around £50 (a whopping £900 million in total!).

Another way to tackle the rising prices is to switch to a fixed or capped rate. Although this may mean paying a slightly higher premium for a while, it could protect you against future price rises whilst allowing you to benefit from any price decreases. Most providers offer this type of tariff, although it is worth noting that some may charge an exit penalty if you should need to leave before the deal expires.

If you'd like to save money on your energy bills, the easiest thing to do is to use a company such as USwitch (featured in our Get Out Of Debt centre) to see how much you can save from switching. It can search all of the different providers and rates for your postcode and will bring back a list from which you can choose the tariff you prefer. So save money by switching supplier and help to guard against rising energy bills, too.

Switch supplier in our Get out of Debt Centre.