How to overcome the rising cost of living - WLR FM

Head of Communications at bonkers.ie, Daragh Cassidy, appeared on WLR FM to discuss the rising cost of living in Ireland, and what the Government could do to alleviate the problem. He also discussed how switching your energy supplier, as well as the providers of your broadband, insurance, and banking accounts will have the greatest impact in reducing your household costs this year. 

A cultural shift in bargain hunting

For a long time, people didn’t consider switching the providers of their energy, insurance, or banking as they believed staying loyal to a particular bank or supplier would be more financially beneficial for them. 

However, this mindset has changed recently as people realised that to cut the cost of their bills, they must go to the providers with the best rates and discounts. 

With the onslaught of the energy crisis and inflation, more and more people are looking to save money on their household costs. Thankfully, at bonkers.ie we are here to help simplify the comparison and switching process. 

Our wide range of free and easy-to-use comparison tools across energy, broadband, banking, and insurance products, will provide you with the best value deals available for you within minutes.

Will the Government’s €100 electricity credit ease the rising energy costs?

Although it is a commendable step by the Government, if you look at the increase in prices, especially in regards to the energy crisis, this one-off €100 credit payment is a mere drop in the ocean in relation to peoples' costly bills. 

There were 35 price hike announcements by energy providers, with some suppliers increasing their prices 5 times last year. This means that on average people are paying €700-800 more on their energy bills this year, with some even paying upwards of €1,000 extra. 

As you can tell, with such vast price increases, this €100 credit payment will only go so far in easing the strain felt by the pockets of Irish households.

There are also concerns about it being a universal payment, meaning that every household, rich, poor and in between will receive it.  Although, I understand the Government wanted to get this payment out as soon as possible, and this was the easiest way to do so. They will have to do something more substantial as this €100 electricity credit will be eaten up very quickly due to the hike in energy prices. 

What can the Government do to help?

For instance, I wonder if the Government could temporarily reduce the rate on VAT on energy bills from 13.5% to 5% for 6 months to a year, as they are currently getting a lot of money from people in extra taxes and charges.

If we examine our current energy bills, the carbon tax is due to go up in May, adding an extra €100 a year to peoples' annual gas bills. While the PSO levy adds €60 to peoples' electricity bills also. The current VAT rate of 13.5% adds about €300-400 a year to your bill, depending on your energy usage.  

As the VAT is applied to the price, when gas and electricity prices go up the Government receives more money from VAT. Therefore, the Government is essentially profiting a little bit from this energy crisis. 

Is it possible for the Government to reduce VAT?

Usually, when requests for VAT to be reduced are made, the Department of Finance says we don’t have the money. 

However, in this case, the Government could reduce the price of VAT from 13.5% to 5% for a year and still receive the same amount of money as they normally would. 

Seeing we have a reduced rate of VAT for the hotel sector and the tourism sector, as well as having certain foods cost at 0% VAT. I don’t see why we couldn’t extend these reduction measures to the energy sector for 6 months to a year. 

Check if you are entitled to social welfare payments

I would encourage listeners to check if they are entitled to any social welfare payments such as the free electricity allowance or winter fuel allowance, etc. 

You can go to your local social welfare office to discover if you are entitled to any payments. The worst they can say is no, and there is no shame in trying. 

You must remember, even if you are not working you are still paying taxes. Every time you turn on a light or switch on the heating you are paying the carbon tax, if you have a car you are also paying tax on that.  

Switch and save on bonkers.ie

Although the €100 payment provided by the government is due to hit people’s accounts in March and there are rumours that this may increase, it will only slightly ease the expensive energy bills you are expected to receive in the coming months.

Unfortunately, the rising energy prices are the main driver behind the increase in our living costs. If you want to tackle this and keep as much of your hard-earned cash in your pocket as possible you need to be looking at switching to different providers who are offering the best value deals and discounts. 

At bonkers.ie, you can cut the cost of your energy and other household bills with our free to use, 100% impartial and accurate comparison tools. 

So whether you want to switch on your energy, broadband, banking or other insurance products, you can do it all in one place and online in just a few minutes. 

Helpful articles

You can learn more about the energy crisis and rising inflation by taking a look at our helpful articles: 

• Check out this blog to discover more ways you can easily beat rising inflation. 
• Unsure about whether or not you should switch energy supplier? We have compiled a list of reasons why you should switch energy supplier in 2022. 
• Here are 15 ways to reduce your energy consumption so that you can save more on your energy bills. 

Keep up to date with other blogs and guides across a range of different topics.

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