Higher energy prices and that sinking feeling

November is here and so is that sinking feeling of higher energy bills

The announcement of higher gas and electricity prices arrives every year, just as the leaves start dropping off the trees. The domino effect soon comes into play: as one supplier raises prices, the other suppliers follow suit.

Wholesale prices have been going up for months, but the energy companies wait until winter is approaching before dumping price increases on us, leaving the public with little time - bearing in mind it takes at least six weeks to switch - to move to a cheaper tariff before high winter energy use kicks in.

This time Scottish & Southern Energy, broke rank first, raising their gas and electricity prices by 9.4 per cent from 1st December, closely followed by British Gas who announced today that from 10th December, prices for both gas and electricity will rise by seven per cent.

It is highly likely that npower, Scottish energy and E.ON will follow suit in the very near future. Only EDF have promised to buck this trend, at least until March 2011, with the announcement of a price freeze on their standard gas and electricity tariffs.

Finding the actual cost

This led me to take a close look at my energy costs and to check out the competition. I should have braced myself for a roller-coaster ride through unit rates, online discounts, potential rewards, cancellation fees and price protection fees to try and find the best deal.

My first point of reference was to go through the last 12 months of gas and electric bills and work out exactly what my energy had cost. The energy suppliers don't make it easy for you; often the direct debit has little relevance to the charge.

My strategy was to calculate exactly how many kwh (kilowatt hours) of gas and units of electricity I had used at both tiers throughout the year. I was lucky, it was easy for me to work out, as apart from one week, the tariff I am on has had the same rates applied for the whole year.

An added advantage is that my meter readings are up-to-date, so the bills are actual, not estimated, so I can get a clear picture of the last 12 months. But for people who have estimated bills and different rates applied over the year, it would be more difficult to find the actual cost.

Finding a better deal

Armed with the true cost of my energy, I could then apply the amount used to other deals and see if they worked out cheaper. Again, a smokescreen seems to be applied by the energy companies to make it difficult to apply like for like and find out if you really will save money. There are so many tariffs available, about to be withdrawn or about to be announced, it is tough to find the best deal, and of course, none of the suppliers are pro-active about helping you to get on a cheaper tariff unless you ask them.

Certain energy companies apply a daily rate and a unit rate rather than a two-tier rate. I thought I had struck gold with one supplier, only to discover that the 12 per cent dual fuel discount is only applied retrospectively, after 12 months, during which time there is no guarantee that the rate will not rise astronomically. However, at least this company did not charge a cancellation fee and there is no minimum contract.

One hundred pounds' cashback from one supplier looked enticing too, but after doing the calculations, it worked out no cheaper than my current deal. Another supplier is not in my area yet and two more were totally uncompetitive.

Feeling battered and brain-dead, I called my original supplier to check on a detail and was immediately offered a £50 credit, which, even when applied to the higher rate I would be charged, made it cheaper than the myriad other options I had trawled through.

So, after a few hours of calculations, analysis, phone calls and hold music, I was back where I started. From this experience I can give three pieces of advice:- work out the exact costs for the last year of your gas and electricity, make sure you get an online account as they are nearly always guaranteed to be five per cent or so less than the standard tariff, and argue, charm or beg your current provider to credit your account!

Use the myfinances.co.uk comparison site to find the best deal on utility suppliers.

The trouble with car insurance

Sometimes it is difficult to understand exactly what you have to do to lower the cost of your car insurance premium.

Well, in 2010, it seems like there isn't much you can do.

Between April and June this year car insurance prices rose by a staggering 14.3 per cent, according to the Confused.com/EMB Car Insurance Price Index. That has meant an annual increase of over 30 per cent.

Figures just released by the AA show the trend has continued. The annual increase, to September 2010 has now reached 39.3 per cent, meaning the average fully comprehensive car insurance policy now costs £792. This is the biggest annual increase recorded in the 16 years the AA has been monitoring car insurance premiums.

The costs of car insurance to insurers, according to their 2009 financial statements, is £122 for every £100 received - and they have passed those costs onto customers, whether they're good drivers or not.

So, what is causing the increase?

New research published this week by Moneysupermarket.com reveals that one in six motorists in the UK admit to having driven without insurance. Quite possibly, these drivers, eight per cent of whom give the reason for being uninsured as cost, would have high premiums.

Although not all of them are currently uninsured, they obviously represent a lot of lost income for insurance companies.

Third party injury claims are another major factor in causing the insurers losses. The next time you see that actor who used to be in The Bill advertising the services of a personal injury lawyer, you might want to utter a quiet curse.

Fraudulent claims are actually falling, but a new type of fraud that has increased since the recession is not being picked up by the industry. Claiming for personal injury and providing false information is simply being missed.

The increase of criminal networks staging crashes, often at roundabouts, where the driver slams on the brakes, causing the car behind to hit them, then claims on the other driver's insurance, also adds to the massive amount of insurance fraud.

Who loses out?

You might imagine that having a small car would help, but, astonishingly, three-door hatchbacks are now the second-highest type of car to insure, just ahead of convertibles - yes you heard me right – convertibles, and just behind the most expensive type, a coupe.

Young drivers, especially men, are being hardest hit. OK, statistically they are one of the biggest risks, but a male driver who is under 21 now has to pay, on average, over £2,600 for full insurance cover. The situation is not much better for females either, with all 17-20 year olds paying an average of £1,900. At the end of June 2010, the average for both sexes was £1,225, just for third party fire and theft cover.

Is there anything we can do?

Taking the Pass Plus qualification will give you some sort of discount with most insurers. You should always use a price comparison site and check as many deals as you can. I also find that haggling on the phone can often knock another five per cent off too.

Failing that, if the poor beleaguered motorist (who is also paying record prices in petrol) lives and works in the same town or is close to good transport links, he may want to consider giving up the car for good.

Find the best deal on car insurance.