Energy giants still up to ‘dirty tricks’

The government was last week accused of letting energy giants off the hook on a series of rip-offs from inaccurate billing to punitive rates if customers pay by cheque.

Gordon Brown, the prime minister, unveiled a £910m package including free cavity-wall and loft insulation for low-income households and pensioners and 50% discounts for everyone else.

However, energy giants continue to engage in “dirty tricks” that can cost consumers hundreds of pounds a year, wiping out the benefit of the government’s energy-efficiency measures.

Over this weekend, German-owned Eon has stopped allowing customers to switch to its cheapest deal, the Extra Saver Version 8 tariff at £903 a year, through comparison sites in an effort to restrict the number of customers getting the tariff.

Critics also said that consumers will ultimately pay the cost of the government’s package. More than half the new money in the fuel plan — £560m — will be raised from suppliers to expand the Carbon Efficiency Reduction Target which obliges them to set aside money for improving energy efficiency in homes.

Energy companies pass on the costs, adding about £38 a year to bills — up £29 from last year. Although the government has said it does not “expect” the extra allocation to be passed on, there is no guarantee. Mark Todd of comparison firm Energyhelpline said: “It would have been better for customers if the extra cash was passed directly on to customers who need it.”

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Are these fixed-rate deals a bright idea?

To fix or not to fix, that is the question. As consumers reel from the latest round of energy bill increases, suppliers are encouraging us to sign up to fixed-rate deals. But with fixed tariffs priced at about 20 per cent more than online tariffs, is fixing the best way forward?

Last month npower and ScottishPower became the last of the big six energy suppliers to raise prices this summer - meaning that households are now facing average annual bills of almost £1,500, a rise of about 40 per cent since last year. Energy companies blame the latest rises on “massive increases in wholesale costs”.

Customers are now being encouraged to fix their prices for the next 12 months, or more, to safeguard against further price rises. British Gas is widely promoting its fixed-price tariff, which fixes your bills until 2011. ScottishPower, EDF Energy and E.ON are offering deals fixed until late next year. While these tariffs will provide consumers with greater peace of mind, you will pay a premium to be on such deals.

For example, Moneysupermarket.com, the comparison website, says that the most competitive British Gas tariff, the online deal Click Energy 5, costs an average of £845 a year, but its fixed-rate tariff would cost the same user £1,240 a year - a hefty £395 more. ScottishPower's online tariff costs £1,141 a year, but the same user would pay £1,213 on a fixed deal - £72 more.

Ann Robinson, of uSwitch.com, another comparison website, says: “It is a difficult one to weigh up. People should be cautious about fixing now, as this round of price rises has finished and prices are unlikely to rise again until February or March. If your fixed deal expires next year, you could benefit from a lower rate for only a few months.”

It is also worth noting that fixed tariffs come with a termination fee of between £50 and £100 if you want to quit the deal early. This does not apply if you are moving house, as you should be able to transfer the tariff to your new address.

“But consumers who are looking for the cheapest deal now should opt for the best online tariff. Not only will this be cheaper than fixed tariffs, it means that you can continue to shop around for the best deal and not be tied in to a long-term contract. With online deals, you input all the meter readings yourself, which means that you should receive more accurate bills and not be overcharged.”
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Home owners have been lagging their lofts in record numbers

Home owners have been lagging their lofts in record numbers in recent weeks in an attempt to cut down on escalating fuel bills, according trading figures.

There has been a 40 per cent jump in the amount of loft insulation sold between June and August

DIY shops and builders' merchants report that they have sold record amounts of insulation products to consumers concerned about their heating bills this winter.

According to GfK, a leading market research firm that monitors retailers' trading, there has been a 40 per cent jump in the amount of loft insulation sold between June and August, compared to the same period last year.

Daniel Fearnley, at GfK, said the scale of the sales boom was surprising considering the DIY market had been hit hard by the housing market slump. Sales of most home improvement products have fallen by at least 10 per cent in the same period.

However, with the average annual gas and electricity bill shooting up from £970 to more than £1,400 since the start of the year, many consumers have taken action to limit their costs.

Jeremy Bird, managing director of Wickes, which sells building products to tradesmen as well as DIY enthusiasts, said: "There's been so much talk about energy bills, and lagging your loft has always been one of the best ways to save money.

"The pay back is pretty quick for a customer, especially if they are prepared to install it themselves. It's a pretty hot and messy job, but one worth doing."

According to the Energy Savings Trust, the installing loft insulation yourself costs £250 on average, but should save a medium-sized household £155 a year on their gas bills, or even more, considering gas bills continue to rise.

Mr Bird said that his company had seen a strong pick-up in customer numbers over the summer – not from builders, many of whom can not find work because of the housing slump – but from DIY customers.

Paula Owen, at the Energy Saving Trust said: "If your loft is un-insulated, about 15 per cent of what you're paying for your heating could be escaping through your roof.

"If everybody in the UK who could install 270mm of loft insulation – nearly a foot's worth of lagging – we would save £556 million each year."

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Energy efficient households 'can save £270 a year'

The average home can save £270 a year by being energy efficient, according to the Energy Saving Trust.

The organisation offers these tips to help people cope with rising energy prices.

* Look for cavities - around 33% of the heat lost in an uninsulated home is through the walls, so insulating them can be one of the most cost-effective ways to save energy in the home. Not all buildings are suitable, but if a house was built between the 1920s and 1980s it could be a candidate for cavity wall insulation, saving up to £120 on annual heating bills.

In a house built before the 1920s, with solid wall construction, and if repairs are needed to walls or rooms, a householder could instal internal or external wall insulation, saving around £380 a year on heating bills.

* Have the boiler checked regularly. If it is not broken, it still might need fixing. Boilers usually break down in winter so it is essential to check it in the summer. If the boiler is more than 15 years old, it is probably time it was replaced with a new energy efficient one. High efficiency condensing boilers are the most energy efficient and will save around a third on heating bills straight away, and even more if upgraded to modern controls.

* Fridge freezers are the most hardworking appliances in kitchens - UK households use £1.8 billion worth of electricity on refrigeration and freezing alone every year. To help cut costs, do not leave the door open longer than necessary, as cold air will escape. Avoid putting hot food into the fridge, defrost the freezer regularly and check the door seals are working properly.

* Look out for the energy saving recommended logo when buying new electrical appliances. The logo appears on a growing range of products - from light bulbs to laundry appliances, indicating the most energy efficient appliances which are also cheaper to run. Replacing an old, energy inefficient fridge-freezer with a new energy saving recommended one could save up to £34 a year.

* An insulating jacket for hot water tanks costs only a few pounds and pays for itself within months. Fit one that is at least 75mm (3") thick to save around £30 a year. If every UK household fitted a jacket on their tank tomorrow, that would save around £130 million of energy every year.

* Close the curtains at dusk. That stops heat escaping through windows.

* Buy energy efficient light bulbs. Priced from just £2.00, energy efficient light bulbs last around 10 times longer.

* Double glazing cuts heat loss through windows by 50% and could cut heating bills by up to £110 a year.

* Loft insulation keeps the heat in a house. If a loft is uninsulated, about 15% of what a household is paying for heating could be escaping through the roof.

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