Price cuts 'will not resolve financial difficulties'

Those who are attempting to build a credit rating by reducing their outgoings may have welcomed news from the big six energy suppliers that they will be reducing their costs.

However, they might find this does not make much of a difference to their overall expenditure and could still be facing financial difficulties.

The average household energy bill was £660 a year in 2006 and the equivalent figure will be £1,259 once the price cuts come into effect, according to research from uSwitch.com.

Last year's price increases left the average annual cost at £1,293, so the reductions will not make much of a difference to people who still face prices that are 91 per cent higher than six years ago.

People anticipating difficulties may be able to make a difference to their outgoings on their own terms such as being more disciplined with their usage, as the government has launched a campaign to increase awareness of the benefits of doing this.

Posted by Tom Burroughs