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Energy unaffordable for many as prices rise 55% over the decade, says the Energy Advice Line

Energy was increasingly unaffordable for many consumers as new figures showed prices had spiralled by 55% over the past decade, according to the Energy Advice Line.

Julian Morgan, managing director of the business electricity comparison, switching and advice service for energy users, said the impact of rocketing bills was taking its toll on consumers, with consumption falling while bills have skyrocketed.

Office of National Statistics (ONS) figures show household spending on energy rose 55% over the decade, with electricity, gas and other household fuels costing a typical UK household £106 a month in 2012, up from £69 a month in 2012. The figures are expressed in 2012 money. As a result of the increases, the percentage of household income spent on energy increased from 3.3% in 2002 to 5.1% in 2012.

At the same time, energy consumption fell as hard-pressed consumers cut back on their energy use and as homes were insulated and fitted with energy-efficient boilers. “The impact of these extraordinary energy price rises has been significant,” Mr Morgan said. “Consumers have been rationing their energy consumption in order to reduce their bills. This confirms what we already know; that many of the least-well off in our society have been going cold because they can’t afford to keep warm.”

“Previous surveys have shown that a considerable number of consumers are going without heating at the expense of their quality of life and health. It’s further evidence that the UK energy market has been failing for some time and that consumers have not been benefiting from a so-called competitive market.”

The ONS figures show that the price rises had particularly taken their toll on retired households, which were worse off than working households even after taking into account fuel and cold weather payments. A retired household spends 7% of their disposable income on heating (£97 per month), while a working household spends 4% (£110 per month). Most of the price rises occurred between 2004 and 2009, peaking at around £108 a month in 2009 and remaining relatively steady at £105 and £106 between 2010 and 2012.

The ONS explained that prices appear to have remained steady in recent years because of a fall in domestic energy prices in 2010, with price rises in subsequent years offset by lower energy use (partly a result of milder winters).

“The message is that all consumers need to take control of their energy bills by doing several things. They need to reduce their energy use where possible, shop around regularly and ensure they are taking advantage of discounts such as paying by direct debit. Many consumers still don’t realise that reputable and independent switching services like ours offer their services for free, so there is absolutely nothing to lose by seeking our help and advice, but everything to gain.”

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