Recent statistics from the regulatory body Ofgem show that the average household spends £1,320 a year on its gas and electricity bills. This figure is double what the average household energy expenditure was ten years ago… so what has changed? Has the cost of energy really gone up that much, or are households now just significantly more wasteful than they were a decade ago?
Well, it actually looks like it’s mainly the cost of the energy that has had an impact - a 2014 UK Government report revealed that per household, energy usage has decreased by 9% since 2000.
The real reason may be down to changes in the oil and gas industries over this period, which have had a significant impact on the cost of these valuable commodities. In 2005, oil prices were the highest the world had seen since the 1970s, in the well publicised oil crisis.
Steady Price Increases...
Since then, the cost has continued to increase. This means that most people are paying more, year on year, for their energy. When you consider this in the context of the recent recession, it starts to become apparent why many people are noticing that each year, they are spending more of their disposable income on energy bills.
But it’s not all doom and gloom. Firstly, the UK’s energy prices are not the most expensive in Europe. New statistics from the UK Department of Climate Change (DECC), indicate that electricity comes in at over 23p per kilowatt hour in Denmark – almost twice as much as in the UK. A cost comparison also shows that costs are higher in Italy, Germany and the Netherlands.
Loyalty to Energy Suppliers?
So what is likely to happen in future? Previous generations have, in general, tended to be loyal to their energy suppliers. There’s an old statistic that adults in the UK were statistically more likely to get divorced, than to change the bank they held their money in. The same was also true of energy providers – families tended to stay with the same company who supplied their energy when they moved in to their home, even if this didn’t necessarily offer the best value.
So what changed? The birth of the internet, and the widespread growth of energy comparison websites has heralded a change in this loyalty. Now, rather than sticking with what they’re used to - families can quickly and easily enter information about their location and energy usage habits into such websotes, and find out who could offer them a better deal.
This free flow of energy comparison information can hopefully help consumers to make better informed choices, increase market competition, and help keep energy prices more stable in years to come. Why not perform a free energy comparison today, right here at Love Energy Savings?
If you are unsure about any aspect of your home or business energy contract, just get in touch with the Love Energy Savings team.