The rising cost of home ownership.... get the best deals

The rising cost of home ownership (taken from our monthly home owner newsletter - free to over 230,000 homeowners every month) click here to subscribe yourself.

We look at how to get the best deals on utilities, travel and food bills in 2008

It seems that everywhere you turn in 2008, there is a cost increase – January has seen energy bills, rail tickets, petrol and even food bills rise, in some cases, by up to 17 per cent. These rising costs are set to increase inflation in the coming months, and with council tax and water rates next on the list, how will families cope with the day-to-day costs of running a home?

We look at ways to reduce the running cost of the average home, from capped utility bills to cheaper fuel options and cashback schemes – as well as simple ways to reduce your energy usage and economise on travel expenses.

Move fast for capped prices
2008 is tipped as the year that the average energy bill will hit £1000 – not a promising start with January only just behind us. Energy providers such as npower and British Gas have already increased prices of gas and electricity by as much as 17 per cent – for the average homeowner this will add £92 to the gas bill and £48 to electricity. Energy providers are blaming the increase on higher wholesale prices of energy, and show no signs of reducing the rates.

For “dual-fuel” customers – who buy both their gas and electricity from one supplier – the average household bill from npower will rise from £908 to £1047. On the same deal from British Gas, dual-fuel bills will rise from £921 to £1051. At the moment you can cap your energy prices with your supplier – but you need to be quick! Some companies are already scrapping their cheapest capped energy deals – Powergen and Scottish & Southern Energy recently withdrew their most competitive fixed tariffs. At the moment, the cheapest deal is British Gas Click 4, which costs around £740 per year for direct-debit customers – £199 cheaper than the average standard deal. Other energy suppliers are offering prices capped until November this year – giving you enough time to make significant savings.

Should I switch?
If you are looking to switch energy suppliers – wait. Not all suppliers have announced price rises yet, but they will follow suit – wait for all the suppliers to announce their hikes and then switch to the best deal. Switching providers is very common, even without such dramatic price increases. In 2006, around 4 million households switched energy provider – 900,000 of these in April alone. It is relatively straightforward and there are many options. You can opt to buy your gas and electricity from the same provider – known as dual-fuel – or have a separate company for each.

Energywatch supplies details of 13 approved price comparison sites on its website – these companies will compare prices from all the energy suppliers to get you the best deal. Most price comparison companies will deal with the new supplier on your behalf and arrange the switch from the old one – this service is also free to the consumer, as the price comparison site receives its fee from the energy company which has won the business.

Switching supplier is worth doing – the latest research from industry regulator Ofgem states that households changing energy supplier for the first time save around £100 per year.

What if I don’t want to switch?
If you have been with the same energy provider for years, or it is the one you inherited with your house, you are in the best position to get a good price without switching. Chances are you are on the company’s highest tariff, left there from years before. You could negotiate a cheaper deal based on your circumstances and take advantage of the new tariffs your energy supplier has to offer.

Changing the way you pay your bills can also make you huge savings. If you pay by direct-debit instead of paying cash or cheque, this can reduce your annual fuel bill by around £40, according to Energywatch. Another easy way to reduce your energy bills is to slightly reduce your usage – it really can make a difference. Try not to leave appliances on standby, switch off lights when you leave a room and use your washing machine at a lower temperature. Turning your heating down by just one degree will also save you £10 a year – and you won’t even notice the temperature difference!

Getting out of the house
Away from the household bills, the costs of running a car are also on the up. Families are paying an average of £4 more for petrol than they were one year ago, and fuel has just hit the record price of 103.62p per litre, compared to 88.25p this time last year. It pays to shop around for petrol, even just locally – the difference can be as much as 14p per litre! According to research from the AA, this could save the average family £384 per year on fuel. www.petrolprices.com gives consumers all of the petrol prices within 10 miles of their postcode, so you can decide where best to buy your fuel! To make further fuel savings, you can also use a cashback card to pay for it. The Shell Mastercard will give you a 3 per cent discount on fuel from Shell garages and a 1 per cent discount elsewhere. Capital One’s cashback card gives 4 per cent cashback on fuel in the first three months and 1 per cent after that. This would save you an additional £77.60 per year!

You may think that not owning a car at all would be the cheaper option, but with increasing rail fares as high as 11 per cent, you could be wrong. There are currently no restrictions on fare increases on certain routes, so rail companies are rapidly raising the prices. As long as the average rise across the board does not exceed 4.8 per cent, they are within their rights. Some routes are worse affected than others – predictably the most popular commuter routes to London are suffering the most.

You can get discounts on fares by booking well in advance and taking advantage of certain deals online. Breaking your journey into two halves could also cut the cost – there are “price barriers” at certain points throughout the country and crossing these increases your fare. Breaking your journey into two tickets at the crossover point can as much as half the price! Two single tickets are also often cheaper than one return.

January Blues
It seems that struggling with post-Christmas financial blues is not enough – price increases across the board have given us even more to worry about! Bills, petrol, mortgage payments and insurance have all gone up – council tax and water rates are next – even food prices are on the rise! Staple goods such as eggs and milk have risen 15 per cent in the last year, meat is 7.5 per cent more expensive and bread costs nearly 6 per cent more. Even McDonalds has recently admitted a price hike of 5-6 per cent on some of its products!

A recent poll by The Times newspaper calculated that a family with a £270,000 variable-rate mortgage and one car will have found their average bills increase by £2380 over the past year. Citizens Advice has produced figures showing that thousands of people are struggling – hopefully our advice goes a little way towards helping!