News that British Gas is to cut its prices could help ease the pressure on financially strapped consumers that are relying on IVA help or a Debt Management Plan as a way to get out of debt. The recession has taken its toll financially, and the bitter winter has left many people struggling to find money to pay their increased utility bills on time. IVA advice is being sought by UK consumers in record numbers since the onset of the credit crunch.
The British Gas announcement confirmed that the company will cut gas prices by an average of 7% immediately. It will be welcome news to people struggling with their finances and in need of debt advice.
According to the company, the average customer will save £55 a year because of the price cut, and they estimate that around eight million households will be better off. British Gas added that this is the third price cut that they have implemented in the past 12 months.
In the wake of the current global credit crisis, energy suppliers have been criticised for not allowing consumers to benefit from cuts in wholesale oil and gas prices, by way of lower bills. From February last year, wholesale gas prices have dropped sharply, and domestic prices dropped in the spring.
After pressure from consumer groups and the regulator British Gas said it had removed the different price structure for pre-payment gas meters. This means that those who settle bills by cash or cheque pay, on average, the same for their energy as pre-pay clients.
Customers benefit to a different degree depending on which part of the UK they live in as well as what price plan they are on. The price cuts are taken as an average. Electricity prices will remain unchanged for now.
The news will be welcomed by debt advice providers struggling to cope with over-committed consumers that are buried under a mountain of credit card debt and other monthly bills.
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