Sunday 15 December 2019

Triple whammy of health and energy hikes to hit households

Charlie Weston Personal Finance Editor

HOUSEHOLD budgets were dealt a new blow after major health insurance and gas providers announced price hikes last night.

Health insurer Aviva will increase the cost of its most popular plan for families for the second time this year.

And the energy regulator is planning to approve a 22pc increase in Bord Gais's gas prices from October.

The gas rise comes as electricity supplied by Bord Gais is due to go up from Monday, pushing up the annual cost by an average of €120 for a family.

Together the three rises could mean a family with gas and electricity from Bord Gais and health insurance from Aviva will be facing combined increases of €450.

Aviva is to push up the cost of its popular Level 2 Hospital plan by 9.5pc for those who are renewing their policies from September 1 onwards.

This plan tends to be taken out by families. A typical family of two adults and two children will see their total premium rise by €186 a year to €2,500. In January Aviva increased the premiums on all its health plans by 14pc.

For those who are not already Aviva customers, the premium cost for Level 2 will go up by 20pc. This means this plan will become €414 more expensive for new customers after September 1. The company blamed medical inflation and the rising cost of claims.

But health insurance experts said that Aviva was trying to encourage customers to take up other cheaper plans where the customer will have to pay an initial amount themselves before making a claim.


Aviva is also reducing the number of different Level 2 plans from 56 down to nine. It insisted there would be no loss of cover or benefits.

Private healthcare experts advised anyone who wants to save money to switch to Aviva's Business Plan Extra corporate plan, which has similar levels of cover to Level 2, but costs €940 per year for an adult.

And the energy regulator said yesterday it was likely to allow Bord Gais to hike its gas prices by 22pc from October.

This will mean that the average household's annual bill will jump by €150 a year to around €863, according to Simon Moynihan of comparison website

Bord Gais had sought an increase of 28pc, due to the higher costs of wholesale gas on international markets.

But the Commission for Energy Regulation said it had decided not to allow some costs that Bord Gais had used in its calculations of what it needs to deliver its service, particularly its level of bad debts.

The regulator said the planned increase was "unavoidable" as the wholesale price of gas had more than doubled in the past two years. The regulator said UK suppliers had raised their prices by a quarter over the last year. It added that gas prices had fallen by 25pc for consumers in the previous two years.

The regulator will make a final decision on the gas increase in late August, after a period of consultation.

Some 110,000 Bord Gais customers are in arrears, while 150,000 ESB customers are behind on their payments.

Mr Moynihan said the other three gas suppliers in the market -- ESB, Airtricity, Flogas -- would hike prices by October.

"By October it will be unlikely that an average household will be able to buy a year's supply of gas for less than €750," he said.

Irish Independent

Also in Business