Spiralling Cost Of Fuel Adding To Debt

Spiralling Cost Of Fuel Adding To Debt

by Caleb James on 22 May, 2012

With austerity measures biting hard and more cuts still to come, there is little doubt that the economy is still in the doldrums.

And with pay freezes, redundancies and rising costs, it is little wonder that many households across the country are struggling to make their money stretch far enough.

Whilst food has rapidly shot up in price, one of the other main culprits is energy, with both gas and electricity far more expensive compared to two years ago and prices at the pumps reaching record levels.

Some experts have estimated that families spend more on filling up the family car each week than they do on shopping for groceries. And two car households now have to pay out around £22 more every month on fuel, as costs have risen.

For many people, a car is no longer a luxury item. And with employment scarcer than ever, many people face a trek into work each day, which simply wouldn’t be manageable on public transport.

But those struggling to afford their domestic fuel bill face an even more crucial dilemma. During the cold weather, many vulnerable groups, such as the elderly, are unable to afford to heat their home as well as buy food, leading to what charities have dubbed the ‘heat or eat’ conundrum.

The number of individuals in fuel debt is now around 4 million nationwide, according to a recent survey, with gas and electricity now costing £183 more on average per year. And although the number of households experiencing fuel debt has fallen slightly, the amount they owe has increased.

To ensure you’re paying the best rates on fuel for both your home and your vehicle, make sure you shop around.

Check out what petrol stations are offering the best rates in your area. For example, you could find that your local supermarket is offering petrol discounts depending on how much you spend in-store – making it cheaper for you to purchase your petrol there.

You could also use price comparison sites to check if you could save money on household fuel by switching providers. You could also get in touch with your local council to see if you’re entitled to fuel discounts or benefits.

Slight changes to how you heat your home could also help. For example, small electrical heaters may be more cost effective to run in comparison to central heating.

The rising cost in fuel has no doubt taken its toll on the budgets of households throughout the UK by stretching already tight budgets.

If you find yourself in a position where you’re struggling with debt repayments, it is essential that you speak to your creditors and explain your situation. Alternatively, you could get advice from a professional debt specialist company who can explain about the various debt solutions available to you. You could find that a Debt Management Plan or an IVA could help you get your finances back on track.

Baines & Ernst is a specialist debt company offering advice on a range of solutions including Debt Management Plans, IVAs and Debt Relief Orders.

About the Author

Caleb James

Caleb James is a financial advisor and journalist, who contributes regularly to financial blogs and industry publications.