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.

British Gas price cut could help ease IVA and Debt Management worries is a post from: The Debt People

According to the bank of England, unsecured consumer credit rose £52m in the month of December. This was mainly driven by credit card borrowing.

For the same period, the number of mortgages that were approved for house purchases fell slightly compared with the previous month, to 59,023. This is still higher than the past six month’s average.

IVA and Debt Management companies have noticed a trend during the downturn where consumers have been inclined to pay off debts, however this appears to be reversing. Some people have been reluctant to save particularly with interest rates being so low. For five months in a row, repayments have outstripped new unsecured consumer credit.

The main cause is credit card debt which has risen by £195m. In an effort to get out of debt, many people have enterd debt Management progarammes or signed up for an IVA. The demand for overdrafts and personal loans has remained low, with repayments topping new agreements by £143 million.

The total amount of net borrowing by individuals rose by £1.2 billion in December, which is double the average of the previous six months. Most of the borrowing is in the form of mortgages.

IVA and Debt Management worries as borrowing on the increase is a post from: The Debt People

The news comes as the country is just emerging from the longest recession for many years. Consumers struggling with debt problems have been approaching debt management companies in increasing numbers seeking IVA advice, or other ways to get out of debt.

Energy bills are expected to be 20% more expensive than for the same period last year, despite a fall in the wholesale price of gas. The combined charge for gas and electricity bills for a typical household are expected to be £104 higher for the quarter.

According to figures from the Daily Express annual bills have increased from an average £543 to £1,233 since 2003. This represents a rise of 127%.

An IVA, or Individual Voluntary Arrangement, is a debt management solution that allows consumers to consolidate their debts into a single monthly payment without the need for a loan. The monthly repayment on an IVA is set at an affordable level and the term of the arrangement is usually 5 years.

Any remaining debt can be written off at the end of the term. An insolvency practitioner will be required to set up and supervise the arrangement, and it is recommended that all consumers consider all of the available options before entering into an agreement. For IVA help it is recommended that you contact a reputable company.

The debt management industry is concerned that the wholesale price of gas fell by 60% during 2008 and 2009, but the savings made by the companies have not been passed on to households in the form of lower bills. A 30% increase in energy consumption has been estimated for this winter as a result of the freezing temperatures over this period.

IVA and Debt Management firms concern over energy bills is a post from: The Debt People