Wealth buildingCapped Price Energy Deals not Being Taken Up
Motley Fool has indicated that, upwards of 50 per cent of customers were unable to take advantage of a capped price energy tariff before the prices last went up.
According to research carried out by the independent financial advice site, 54 per cent of people were unable to protect themselves against hikes enacted by some of the UK's major energy suppliers including EDF and British Gas. It went on to note that despite large numbers of consumers missing out in the scramble to secure cheap energy, 22 per cent were successful in locking their tariffs at pre-rise prices for a set period. However, it noted that these consumers also face uncertainty as to the amount they will need to pay when the arrangement expires.
For the remaining 23 per cent of Motley Fool panel members interviewed in early August, making sure they were on fixed-price arrangements was of little importance. They stated that initially, capped tariffs can be more expensive, with many consumers opting for the cheaper, but more uncertain variable products.
Householders who have found themselves struggling to keep their heads above water in the rising tide of energy price inflation, taking out a debt consolidation loan may provide an effective way to get their finances back on track before the winter sets in and fuel usage increases. In spreading out repayments over a longer period, people may find they are left with more spare cash at the end of the month, which could in turn to be used to invest in energy saving devices to reduce gas and electricity bills.
Laura Starkey, spokesperson for the Motley Fool, when offering advice to those who could not cap their energy prices, stated: "Now the dust has settled on the latest round of tariff announcements a more complex situation has emerged.
"Consumers are faced with three choices. First, they wait and see. Doing so could risk missing out on the last of the better deals. Secondly, they could sign up for a capped tariff now, secured that their outgoings were not going to increase, even though it now more expensive. Or thirdly, they get ready to start switching. Finding a new tariff after each price hike may be the best way to keep on top of rising prices by applying a little regular legwork."
She concluded by commenting that consumers should keep in mind that opting for capped-price products may not always deliver the returns, with some being less competitive in the short term. Householders should use the rule that as long as a capped tariff is between 15 and 20 per cent more than a variable alternative, it will probably deliver a long-term saving, Ms Starkey insisted.
For those who are looking for a way out of an expensive tariff, taking out a personal loan may prove an effective way to pay off outstanding balances quickly and move to a cheaper supplier before the winter gets underway. Doing so may become increasingly important for those looking to make a saving after British Gas warned that domestic gas prices are likely to increase as much as 60 per cent over the course of the next two years.