Reports highlights plight of squeezed families
A new report highlighting the squeeze on household budgets was proof that higher energy bills were one of the main reasons consumers were struggling to make ends meet, according to the commercial electric price comparison service Energy Advice Line.
Figures from the Office for National Statistics show weekly spending on housing costs became the biggest item of expenditure in 2012, outstripping transport for the first time. “This report is proof that spiralling energy bills are one of the main reasons households are in financial crisis and confirms what we have known for some time,” said Julian Morgan, managing director of the Energy Advice Line.
“Energy bills are making a bigger and bigger dent in household finances, to the point where something has to give, especially for low-income families. A separate report last month by Citizens Advice showed that energy prices had soared up to eight times the rate of earnings and by this month will have increased by 37% since October 2010. Clearly that’s an untenable situation for many families. It really is a case of heating or eating in some households.”
The Office for National Statistics said a decline in disposable income since the banking crisis had tightened the financial screw on average householders, which had £489 to spend in 2012, compared with £526.40 in 2006 after accounting for inflation.For the poorest families, this meant they spent 25% of their income on housing, compared with 9% among the richest households. Low-income families reduced their spending on food by almost £1 a week after inflation to cope with the squeeze.
Mr Morgan said that while more households than ever were switching energy companies to secure cheaper deals, the number who stayed with the same supplier year-on-year remained worryingly high. “It’s true that all the Big Six energy suppliers have significantly increased their prices in recent weeks and months, but it is still very important to shop around for the best deals available, there are excellent tariffs available from some of the smaller independent suppliers and a range of fixed-term deals are being offered that are worth considering. It’s very important for all consumers to make informed choices about their energy supplier and really investigate what’s available. It’s also important for consumers to remember to do this on a regular basis, not just when energy prices are in the headlines.”