Utility bills, including gas and electricity, are expected to increase by a whopping 50% over the next four years as gas and electricity suppliers look to offset rising wholesale costs. Further taking it’s toll on consumer bank accounts and credit cards.
This year alone we are expected to see an increase of 15% in energy prices, according to the Bank of England Governor, Mervyn King. However, it’s also been noted by Deutsche Bank that even higher bills are possible from 2013 should suppliers attempt to protect profit margins.
With the average household income dropping back to 2005 levels, high inflation levels and the ever increasing cost of living, many are concerned that this could further impact consumers throughout the UK. Some economists have even ventured that, should earnings and benefits fall further it could represent the most significant fall in “median incomes since 1981.”
Since many people around the UK are already suffering from significant from personal loan, credit card debts, unemployment and crippling taxes, it’s proving more and more urgent for changes to welfare reform and the availability of credit where it’s needed. The Work and Pensions Secretary,
Iain Duncan Smith, commented:
“This underlines the urgent need for our radical programme for Welfare Reform and especially Universal Credit which will make work pay and end the madness of generations living on benefits with no reason to aspire for more.”
Mr Duncan Smith went on to add that Government plans will help around 1 million people out of poverty and back into work. This is expected to end “the depressing spiral of a lifetime on benefits that blights too many of our towns and cities.”
In a positive move to controlling energy regulations and costs, Ofgem have been investigating the cost of gas and electricty suggested that energy companies respond very quickly in raising their prices when costs increase, however, they are a lot slower in responding when costs fall.
Hardly surprising is it? It’s all about profitability at the end of the day - it would just be nice to see an “ethical” energy company who responds to the needs of their customers – maybe it’s time for a shake-up, similar to the one the banks received when the British economy collapsed.