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November 2005

8.9 MILLION1 ELDERLY PEOPLE WILL STRUGGLE TO PAY ENERGY BILLS THIS WINTER

A mere £20 increase in gas and electricity prices will see 4 million1 (28%2) elderly people struggle to pay their energy bills

With highest rise in winter death toll for 5 years3, concerns over the health of the elderly intensifies as 35% have already reduced the amount of heating they use following price rises

Risk of price rises of up to 15%4 in 2006 set to increase ‘fuel poor’ numbers, as poorest 10%5 of the population are already spending 9% of their income on energy bills

A comprehensive study of the over 60s by uSwitch.com, the independent online comparison and switching site, has revealed that an alarming number of elderly people will struggle to keep their homes warm as rising energy bills and a colder than average winter begin to bite. This could see a substantial rise in the three million households6 already living in fuel poverty.

These are stark statistics considering that we are in line for one of the coldest winters in a decade and predictions indicate that further price increases could push the average bill up by another £1167 in the first quarter of 2006.

Gordon Lishman, Age Concern's Director-General, said: "All older people should be able to heat their homes without being worried about the bills they're likely to face. Many pensioners live on a low, fixed income and are hit particularly hard by hikes in their fuel bills.

"Energy companies must do everything they can to protect vulnerable groups such as pensioners from price increases. The Government should increase the state pension so that pensioners have enough money to cover basic living costs such as heating their homes."

Price increases of £1918 in the last two years have contributed to 2.6 million (18%) older people struggling to finance energy bills, with some having to get extra credit to fund this. To compensate for price rises, 23% of over 60’s are trying to find ways to make savings elsewhere. Worryingly, 53% have either reduced the amount of heating they use or are choosing to wrap up warm instead, which could have serious health implications if they do not adequately heat their home.

Ann Robinson, Director of Consumer Policy at uSwitch.com, states; “Low usage energy users are already paying £50 more for their energy than they were at the start of this year. Our research reveals that only a marginal increase in energy bills, either from increased usage or higher prices will have a serious impact on the thousands of vulnerable households who are at risk of falling into fuel poverty.”

“We would urge people to see if they are eligible for the benefits offered by the Government as well as reviewing their energy supplier and opting for a better deal. The average saving to be made can be as high as £1709, which would allow vulnerable consumers to keep warm for longer”.

Fuel Poverty – the facts:
It is estimated that for every 1% rise in fuel prices, 40,000 households are pushed into fuel poverty and there are already 3 million households classified as being affected by this10.
Age Concern has already stated that eight pensioners could die from the cold every hour in the UK this winter and 35% will have to reduce the time they put their heating on overall to mitigate the effects of a cold winter.
Despite government grants and benefits available to help those struggling to pay their energy bills, only 20% of over 60s are taking advantage of these incentives. As many as 1.8 million people do not currently claim their entitlement to council tax benefit 11.
In the winter of 2004/05 there was an estimated 31,60012 more deaths in England and Wales compared to the non-winter period and we fear this number can only rise given the unusually cold temperature predicted for this winter by the Met Office.
uSwitch.com and Age Concern recommend taking a series of simple measures to help ensure a warm and safe winter. Here are our top tips to help you fight the cold:
Prepare your home
Stock up on provisions in case it is too cold to go to the shops
Seal gaps around windows and doors
Insulate the loft to reduce heat loss
Check your heating system is working and serviced once a year
Keep your home at the right temperature
Hang thermometers in the living room and bedroom and keep temperatures between 21 and 24 degrees Centigrade (70 and 75 degrees Fahrenheit).
Claim your rightful benefits and grants
Everyone over 60 should claim the Winter Fuel Payment and there are many other benefits and grants to which you may be entitled.
Call SeniorLine to find out more: 0808 800 6565

Apply for grants and programmes
There are many free products and services designed specifically for older people, such as the British Gas 'Here to HELP' programme. Contact major energy suppliers to find out what they offer.
Dress appropriately
Wear thin layers of clothes rather than one thick layer
Choose clothes made with wool, cotton, or fleecy synthetic materials
Wearing the right clothing to bed is as important as wrapping up outdoors
Stay active
Don’t stay sitting still for long periods
Spread chores through day and alternate between rest and activity
Exercise without taking risks in wet or icy weather
Get a flu jab
Eat well
Eat at least one hot meal a day
Sip hot drinks regularly throughout day and before bedtime
Keep a flask of hot drink by your bed should you wake up feeling cold

Security of supply is top global concern for utilities companies!

Blackouts on both sides of the Atlantic have propelled security of energy supply to become the top concern for utilities companies around the world, according to a report launched today by PriceWaterhouseCoopers.

Major investment is needed to avoid crippling blackouts. Jon Miller, Director of uSwitch.com, the independent utilities comparison service, says it is inevitable that consumers will consequently see their electricity bills rise.

Powergen believe that domestic prices will rise by 15 - 20% over the next few years. However, as all major suppliers (with the exception of Scottish & Southern Energy) have already increased electricity prices by an average 6.6% this year, Miller believes it is unlikely that prices will increase over the next 6-8 months.

" Consumers should brace themselves for a raft of price increases next year, and take this report as a serious warning that the cost of electricity is on the rise. Assuming the investment goes ahead, we expect the average price increase to be higher than the 6.6 per cent rises already seen this year. Consumers need to think about offsetting this cost now and should review their electricity supplier regularly to ensure they are on the cheapest tariff. If you’ve never switched before, you could save as much as £140 a year.” says Jon Miller.


Who are uSwitch?

uSwitch.com are the UK's largest independent online price comparison calculator for gas, electricity, digital television and home telephone. Users provide details of their current suppliers & uSwitch.com shows them how much they could save and encourages them to switch suppliers online.

Who uses uSwitch.com?

Anybody who wants to compare prices and save money on their household bills.

What details do I need to give?
The only information you need to make a price comparison is your postcode, although we can help you make an accurate assessment of your usage and annual bill if you provide us with exact details. We can also make estimates of your usage if you enter your profile into the calculator. If you decide to make the switch you will need to fill in your personal details (these pages are secure).

BRITISH GAS
• British Gas have increased gas prices three times in the last two years
• BG have increased gas prices by an average 13.2% over the last two years
• BG have increased electricity prices twice in the last two years
• BG have increased electricity prices by an average 4.8% in the last two years
• Overall, British Gas have increased prices by an average 9% over the last two years (incl. gas/elec)
• British Gas has over 13 million customers...
• Since competition began in the gas market in May 1998, 8 million out of British Gas’ 20 million domestic customers have switched away (Source: Ofgem).

ENERGY
• Average annual savings customers can make by switching gas and electricity via uSwitch.com is £140 (£80 for Gas, £60 for electricity)
• Cheapest supplier: Depends on usage levels and the region in which you live. However, Powergen Energy Online’s tariff is proving very competitive (online MDD dual fuel only).
• Suppliers offering best value for service against price are Powergen and Scottish Power.
• An average winter can increase a households fuel costs by 40 – 50% (Source: Alliance to Save Energy)
• Lighting costs account for 20% of the average electricity bill
• There is an estimated 15.8 million households in the UK who have not switched energy suppliers. This means there is £2.2 billion in unclaimed energy savings which gas and electricity providers are sitting on. (Source: uSwitch.com).
• Over 19 million gas and electricity customers have switched supplier in the last four years (source: Ofgem: making markets work for customers).
• Virtually all customers who have not switched supplier can make good savings. Every customer can save from their first switch, by up to 23% in gas or 20% in electricity. (source: Ofgem: making markets work for customers).
• Average energy prices have fallen by 13% in real terms since competition began (Source: Ofgem).
• The current rate of switching (38 per cent in electricity and 37 per cent in gas) is higher than in any other comparable industry, including six per cent for current bank accounts, 11 per cent for fixed-line telephones and 12 per cent for mortgages. It is second only to car insurance (Source: Ofgem).
• Today, over 70 per cent of all gas customers and half of all electricity customers are on tariffs that are not price-controlled (Source: Ofgem).
• An independent MORI survey found that almost 90 per cent of people who have switched their gas and electricity supplier have found it easy. 66 per cent of all electricity switchers and 58 per cent of gas switchers found it very easy (Source: Ofgem).

GAS
• Since competition began in the gas market in May 1998, 8 million out of British Gas’ 20 million domestic customers have switched away from the company (Source: Ofgem Dec 2003).
• Since competition began four years ago, the average annual domestic gas bill has fallen from £375 to £308 (18 per cent) (Source: Ofgem).
• Since privatization, average prices have fallen by 32% for gas (Source: Ofgem).
• Wholesale gas prices are closely linked to the price of oil and gas in Europe. Recent price fluctuations reflect the price rises in Europe where the majority of the market is still unregulated (Source: Ofgem).
• Wholesale gas prices have doubled in the last two years and this would have to be reflected in any price control that Ofgem sets on British Gas, allowing them to pass on justifiable costs (Source: Ofgem).
• Wholesale gas prices increased after gas was exported to continental Europe where prices are higher because a) there is little competition and b) they are linked to high oil prices (Source: Ofgem).

ELECTRICITY
• Since the electricity market was opened up to competition in May 1999, 11 million out of the regional electricity companies’ 26 million domestic customers have switched away from their old monopoly supplier. (Source: Ofgem Dec 2003)
• Since competition began four years ago, the average annual domestic electricity bill has fallen from £268 to £238 (11 per cent) (Source: Ofgem).
• Since the market was opened to competition in May 1999, 11 million out of the regional electricity companies’ 26 million domestic customers have switched away from their old monopoly supplier (Source: Ofgem).
• Since privatization, average prices have fallen by 25% for electricity (Source: Ofgem).
• Further to the introduction of NETA, and alongside other factors such as falling fuel prices, a generous capacity margin and increased competition in generation, the cost of wholesale electricity has fallen by 40% (Source: Ofgem).
• Gross switching in electricity has increased from 38 per cent to 43 per cent between March 2002 and March 2003 (Source: Ofgem: making markets work for customers).

MILESTONES
1986 British Gas privatised
1989 Electricity industry privatized
March 1991 60% of National Power and Powergen floated on stock market
June 1991 Hydro and Scottish Power floated on stock market
June 1993 Northern Ireland Electricity floated on stock market
March 1995 Remaining 40% of National Power and Powergen floated on stock market
Dec 1995 National Grid Group floated on stock market
April 1996 Domestic gas customers first able to switch supplier
July 1996 British Energy floated on stock market
May 1998 Domestic gas market fully open to competition
Sept 1998 Domestic electricity customers first able to switch supplier
Oct 1998 Opening of the interconnector gas pipeline between Bacton, East Anglia & Zeebrugge, Belgium
Jan 1999 The roles of the Office of Gas Supply and the Office of Electricity Regulation merged to
become OFGEM.
May 1999 Domestic electricity market fully open to competition
June 1999 Ofgem formed
Oct 1999 Introduction of new gas trading arrangements to the wholesale gas markets
Jan 2000 Utilities Bill introduced in the House of Commons
Nov 2000 Energywatch formed
March 2001 New Electricity Trading Arrangements (NETA) introduced for wholesale electricity
April 2002 National Grid and Lattice agree terms of merger to become National Grid Transco
2002 Domestic price controls lifted
Oct 2002 Ofgem applies financial penalty if £2million to London Electricity for misselling electricity
Oct 2002 National Grid Transco formed following completion of merger

ENERGY EFFICIENCY
• The government pays out £150m each year in grants under its Warm Front Scheme (Source: BBC).
• Turning your central heating thermostat down by just one degree will save you approx. £20 a year
• Energy savings light bulbs last longer than ordinary bulbs and use a fifth of the electricity – saving you about £80 over the lifetime of the bulb
• Many UK homes are poorly insulated and lose up to 33 per cent of their heat through the walls. Consumers can save up to £100 per year on their heating bill if they insulate walls and lofts and draught proof doors and windows.
• Improving your loft insulation can save you up to 20% on your heating bills
• Exterior doors – fit easy to fix brush or PVC seals to your external doors to help eliminate draughts and get rid of cold spots.
• Windows – the ideal situation is to fit double-glazing, but many DIY shops stock much cheaper alternatives.
• Curtains – close your curtains at dusk to stop heat escaping through the windows.
• Turn lights off when you leave a room and adjust curtains/blinds to let in as much light as possible during the day.
• Defrost your fridge/freezer regularly to keep it running efficiently and cheaply. Avoid putting hot or warm food straight into the fridge.
• Kettles – heat only the amount of water you need.
• Taps – turn them off after use. A dripping tap can waste enough water to fill a bath.
• Showers – a shower uses on two-fifths of the water needed for a bath.

Longer-term improvements
• Boiler – replacing a 15-year model could save you over 20% on your fuel bills, around 32% if you’re installing a condensing boiler and up to 40% if you also install good heating controls.
• Wall insulation – this can be the most cost-effective way to save energy around the home. Up to 33% of the heat in your home is lost through the walls.
• Double-glazing – you could be loosing up to 20 per cent of your home’s heat through single glazed and poorly insulated window frames. With double-glazing you can actually cut these losses by over a half.
• Hot water tank – fit an insulating jacket to your hot water cylinder. Fit a British Standard jacket that’s at least 7.5cm thick. It will cost around £10 and will give a saving of £10 - £15 a year.
• Hot water pipes – these can also be insulated to stop heat escaping from them. The best pipes to insulate are the ones between the boiler and the hot water cylinder. Cost: around £1 per metre.

MONEY SAVING TIPS
• Turn down indoor heating by one degree (Annual Saving = £20 saving)
• Invest in energy saving light bulbs (Annual Saving = £10 saving)
• Insulate walls and lofts and draught proof doors and windows saves a (Annual Saving = £100 saving on heating bills).
• Avoid local (incumbent) suppliers - they are always more expensive.
• Pay your bills by direct debit
• Shop around for an alternative supplier (average annual saving £140 via uSwitch)
• One of our customers who lives in Newcastle with her three children, recently switched from British Gas & Npower to Powergen’s new energy online tariff and saved herself £205 a year

MISSELLING

Tips to surviving doorstep/high street/phone selling
• When dealing with a persistent telephone sales person do NOT put the phone down – take as much detail as possible, the callers name, company, telephone number, and position in the company.
• On the doorstep or on the high street always ask for and check ID cards. Reputable sales agents will not mind showing you.
• Never sign, or commit yourself to anything without giving yourself time to think about it and to compare prices from other suppliers in your area.
• You may be offered a special price or bonus gift if you sign immediately - don't sign anything until you are exactly sure of the commitment you will be making.
• Be wary of verbal promises - ensure any promises or offers are written into the agreement. If the sales agent refuses - don't sign!
• If you change your mind after you have signed an agreement, there is a 7-14 day cooling off period (varies from energy supplier) during which time you may cancel the agreement.
• Do NOT sign anything described as "taking part in a survey", "entry to a free prize draw" or "to let my boss know I've called on you".
• If you do decide to switch, ensure you have the sales agents ID details which can help you resolve any future problems you may have.
• If you are not interested in the sales agent’s offer, do NOT agree to have your meter read by this person.
• If you are not interested in the sales agent’s offer, do NOT disclose your SI/MPAN number. This is your unique customer number from your energy company of your electricity meter at your property.

HOME TELEPHONE
• BT retains 71% market share, despite the industry being deregulated 20 years ago.
• Increasing take-up of Carrier Pre Selection services contributed to a fall in BT’s fixed line market share of voice calls to 57%. (Source: Ofcom: Fixed Market Update, April-June ’03).
• Oftel (now Ofcom) has regulated the telecoms sector since the privatization of BT in 1984.
• There are now approximately 170 public fixed telecommunications providers, 5 mobile providers, 59 mobile service providers and 700 internet service providers.
• Oftel consumer research conducted in August 2003 showed that 18% of Internet households used broadband. (Source: Ofcom: Fixed Market Update, April-June ’03).
• The average phone bill per quarter (based on BT) is £70
• Average annual saving that customers can make by switching via uSwitch.com is £160
• Best value suppliers for international calls are Just Dial (4.04p), GoTalk (4.8p), Superline (6.43p) or Telco (6.62p)
• One of the best value suppliers for UK landline calls is Just Dial – they have three competitive tariffs, low subscription fees and cheap rates i.e. 2p daytime for Options 1 & 2.
• The most expensive suppliers tend to be BT and the cable companies, such as NTL
• The highest annual saving recorded via uSwitch is over £9,000 - this customer switched from BT to OneTel. His annual bill was originally in excess of £35,000.

CORPORATE
• After only three years, uSwitch.com has established itself as the market leader in tariff analysis for the domestic energy and telecoms market
• uSwitch is the UK’s biggest and fastest growing comparison and switching company, ranked number 2 in the utilities sector. We currently attract more visitors than all energy supplier websites (with the exception of British Gas - house.co.uk)*
• Reached profitability in November 2001
• 180,000 unique website visitors per month (average)
• 15% market share of the UK’s utility website visitors*
• Consistently and favorably reviewed by journalists who have commented on the usefulness of the website
• The UK’s only comparison website which compares digital TV suppliers
• The UK’s first website to be accredited by Ofgem
• The UK’s first website to be awarded the Oftel (now Ofcom) PASS accreditation (16 June 2003)
• The only website to include a service rating across all UK energy suppliers
• The only utility comparison website to produce and air TV and Radio advertising, helping to create awareness of general switching.
*Source: Hitwise.co.uk – real-time competitive intelligence

Home Telephone Glossary

WLR - Wholesale Line Rental
CPS - Carrier Pre-Selection (calls are re-routed at the exchange without the need for an auto dialer or prefix number)
IA - Indirect Access (calls are re-routed using an auto dialer or prefix number)
SP - Service Provider (referring to alternative providers, other than BT/ Cable operators)
DQ - Directory Enquiries
CLI - Calling Line Identification

Previous:

SCHOOL’S OUT FOR SUMMER – BUT MAKE SURE YOU DO YOUR MATHS WHEN IT COMES TO YOUR HOME PHONE BILL
? As call costs go up during summer holidays, uSwitch.com urges parents to review their phone provider

With the summer holidays now in full swing, British parents will have their hands full with arrangements, activities and outings. Couple this with teenagers spending hours on the phone during the day and by the time the kids go back to school in September, Mum and Dad might well be in for a shock when they see what an impact all that extra chat has had on the household phone bill. According to independent comparison and switching service uSwitch.com, families could see their bills increase by as much as £17 during the 6 week summer holidays.

And what’s more, families could be missing out on savings of over £10 a month by sticking with BT and not shopping around – which could add up to a massive £118.38 over a year!

Switching your home phone supplier is easy, takes less than 15 minutes, and could result in significant savings which could even be put towards new school uniforms in September!”