The official Consumer Prices Index (CPI) inflation benchmark has slid to just 2.2%, just as the UK’s biggest energy providers announce a massive hike in prices.
Yesterday, Scottish & Southern Energy raised their prices by 9%, while British Gas and npower also announced massive tariff hikes. The rest of the UK’s ‘big six’ energy providers, including E.ON, EDF and Scottish Power, will follow in the coming months.
The low cost of living will also trigger a drop in the amount of benefits paid out, leaving millions across Britain on a much smaller 2.2% rise compared to the 5.2% rise received last year.
Chris Crowe, a Barclays Capital economist, has warned that CPI is likely to peak at 3% in 2013. He said: “Gas and electricity accounts for around 4% of the CPI basket, so 9% rises could add as much as 0.4% points to inflation.”
As the chill of Winter draws ever closer, millions of households across Britain will be cranking up the heating and no doubt noticing the impact this has on their bank accounts.
A few tips for keeping your heating bill as low as possible include:
- Do your research – ask around, get quotes and switch to the cheapest energy provider you can find.
- Stick tin foil behind your radiator – tin foil, when stuck shiny-side up, will reflect the radiator’s heat back around the room and prevent it from escaping through the walls. This will allow you to turn the radiator down without compromising on warmth.
- Locate drafts – light a candle and place it around doors and windows so you can locate where cold air is coming in. You can then use a draft excluder seal in these places to keep heat in.
- Keep heating on a timer so it turns on an hour before you wake up in the morning, turns off just before you leave and turns back on again an hour before you arrive back home in the evening.
- Turn the thermostat down – turning the temperature down by just one degree can cut your bill by a massive 10%!
The trick to staying on top of your finances during tough times is to stick to a budget. Knowing exactly how much is coming in and going out will help you to set a limit to the amount you can feasibly spend.
To learn more about budgeting, and to find out how an accountant could help you save money, please visit our page on Personal Finances.