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Sundaytimes

Price rises put the heat on consumers

The cost of fuel may have fallen but other bills are heading in the opposite direction, writes Mark Channing

CONSUMER prices fell by 0.3% in 2014 but the figures produced by the Central Statistics Office hide a raft of price rises for many essential services.

According to experts, the cost of insuring your car could rise by up to 30% this year, while those renewing health insurance will also see premiums increase. Sky, UPC and Eircom are hiking prices for phone, broadband and television bundles for millions of households, while energy companies have been slow to pass on the benefits of tumbling oil and gas prices.

There has been some relief. Petrol and diesel prices have come down —although by far less than the underlying fall in oil prices. We identify the prices that are rising despite deflation, and tell you what you can do about them.

TV BUNDLES

The cost of TV, phone and broadband bundles is going up next month but, if you act fast, you may be able to escape the worst of the price rises.

UPC and Sky—the two biggest TV services providers — are increasing prices for a range of bundles from February 1.

Meanwhile, Eircom customers face price hikes of between €2 and €8 a month fromApril 1.

Because the price increases constitute a significant change to contracts, you are allowed to cancel your subscription mid-contract without penalty and look around for a better deal. However, you must cancel within 30 days of your provider informing you of the price increase.

According to experts, the option to cancel gives you the chance to negotiate a better deal with your provider or switch to a cheaper plan from a competitor.

GAS & ELECTRICITY

Bord Gais Energy said last week it would reduce electricity and gas prices for all customers from March 16, saving €54 a year for households with average consumption. The move follows a similar cut by Electric Ireland in November, although that applied to electricity only.

The reductions — 3.5% on gas and 2.5% on electricity —are paltry compared with big price reductions in wholesale energy prices in recent weeks. Energy companies have been accused of ripping off loyal customers by banking most of the savings from lower wholesale gas prices, while reserving discounts for new customers only.

The wholesale price of gas, the key driver of gas and electricity prices in Ireland, fell by 27% in 2014, according to energy supplier Vayu.

Despite the fall, most consumers are paying the same for gas and electricity as they did 12months ago.

Simon Moynihan, of price comparison site bonkers.ie, said: “The energy companies generate electricity using natural gas. They obviously have money in their coffers now, so why are we still paying top dollar?”

We asked the energy companies whether consumers could expect to see their bills go down as a result of falling wholesale gas prices.

SSE Airtricity said that wholesale prices accounted for only half of the consumers’ bills but promised “if we can lower prices, we will”.

Energia said it fixed the wholesale prices of energy up to 24 months in advance so there was a time lag before reductions could feed through to customers.

Until energy companies reduce their standard tariffs, the only way for households to get discounts is to keep switching provider. The discounts typically expire after a year, when customers are transferred to providers’ more expensive standard tariffs.

The best deals require you to sign up for online billing and pay by direct debit.

According to Bonkers, the cheapest electricity-only deal is Electric Ireland’s ValueSaver tariff, which would save households consuming electricity at the national average €156 a year compared with the company’s standard tariff.

The cheapest gas-only supplier is Flogas, which can save a household using the national average €158 a year, according to Bonkers.

Bonkers says it is cheaper to buy gas and electricity separately instead of signing up for a dual fuel deal with a single supplier.

HEALTH INSURANCE

More than 40% of health insurance policies fall due for renewal in the first three months of the year. January is the month when insurers traditionally increase their prices.

So far in 2015, only Glo-Health and Aviva have raised their prices but anybody renewing now will be hit by premium hikes announced after their last renewal.

Dermot Goode of totalhealthcover.ie, an adviser, said: “If you haven’t reviewed your cover in the past couple of years, you are definitely paying too much.”

Goode said nine out of 10 consumers he sees are on the wrong plan, and could save by switching to a cheaper alternative. “You need to ask the insurance companies for the closest equivalent that’s cheaper than the plan you have,” he said.

Laya’s ConnectCare plan, for example, costs €1,260 per adult to renew. Its Connect Choice plan is an equivalent policy but costs €160 less at €1,100 per adult.

JANUARY IS THE MONTH INSURERS TRADITIONALLY INCREASE THEIR PRICES

CAR/HOME INSURANCE

Motor premiums went up by 11.6% last year, according to the CSO, with experts predicting more double-digit increases in 2015. Jonathan Hehir of coverinaclick.ie, a broker, expects premiums to go up by 10% - 20% on average, but said some motorists could see jumps of up to 30%.

To keep costs down, Hehir suggests taking on a larger policy excess — the amount you have to pay from your own pocket before the insurance kicks in.

“Most people don’t claim for minor damage to avoid impacting their no-claims bonus,” he said. “Go for an excess of €500 to get the benefit of the lower premium.”

Assuming a new car would be less costly to insure could be a mistake. “Insurance rates are impossible to predict — premiums for two similar cars can vary considerably,” said Hehir.

Home insurance premiums are unlikely to rise significantly in 2015. “Unless we have a severe weather event such as a big freeze, I don’t see home insurance premiums rising,” said Hehir. “They should remain fairly static with maybe 1% or 2% increases.”

FUEL PRICES

The fall in the price of oil — which has dropped by almost 60% in the past six months — has resulted in lower petrol and diesel prices formotorists. The cost of home heating oil is also down.

Figures compiled by AA Ireland for The Sunday Times show that motorists are saving more than €380 a year on average because of the crash in oil prices.

The average price of petrol is €1.32 a litre, according to the AA — a drop of 10.8c since December. Diesel prices have also fallen, down 9.7c to an average of €1.24 a litre.

Prices vary widely, however. Pumps.ie, a fuel comparison site, recorded differences of up to 12c in the cost of a litre of petrol, and 15c in the cost of a litre of diesel, in Dublin last week.

The cost of home heating oil is down by 17.5% since last year, according to the CSO. The average cost of a 1,000-litre fill has dropped from €820 to €660 in the past six months, according to cheapestoil.ie, a price comparison site.

PUBLIC TRANSPORT

Fares rose by just 0.6% in 2014, according to the CSO, but bus and rail users have been hit by much higher price hikes.

Last month Dublin Bus increased cash fares by up to 7%, while there were jumps of up to 6% for Bus Eireann, Luas and InterCity rail fares.

Bus and rail users can avoid the increases by using the prepaid Leap card, which is topped up before travel.

Single Leap card fares are at least 20% cheaper than cash fares across Dublin Bus, Luas, Dart, Commuter rail and Bus Eireann.

Return Leap card fares are 12% to 20% cheaper than return cash fares on Luas, Dart or commuter rail.

Meanwhile, taxi fares will go up by an average of 4% from April 30. Smartphone taxi apps such as Hailo and Uber claim that their users can get discounts of up to 30%

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