As the cost of living continues to bite, make sure you get savvy when it comes to these expenses. Big changes are coming and you need to be across them …
Australian families could pocket or miss out on hundreds of dollars in savings depending on a series of upcoming pricing decisions. Authorities are due to make these in the next few weeks.
While the Reserve Bank’s rate decision on 18 February could have a huge impact on home loan repayments, the energy regulators’ draft pricing announcements, along with an imminent call to be made regarding health insurance premiums, will also have a major impact on household finances.
These authorities have the power to deliver considerable relief, or issue fresh pain to people battling the cost of living.
It’s an election year, so the good news is there will be plenty of scrutiny over each decision that’s made.
Health insurance premiums
A “perfect storm” of inflationary pressures and political tensions have added heat to health premium pricing negotiations this year.
Health Minister, Mark Butler, has already rejected initial proposals from health funds, urging them to come up with a more “reasonable” average figure to reduce the strain on household budgets.
When the decision is finally made, Australians will have until 1 April to compare their options before the changes take effect.
It’s critical that customers be prepared, as shopping for cheaper deals may be one of the only ways for some to avoid the sting.
While the headline average figure is what everyone talks about, we know that there can be huge discrepancies between insurers and policies. Last year, we saw increases as low as 0.27 per cent and as high as 5.82 per cent at individual funds, so doing some research can make a big difference.
Some health insurers will even allow you to pay for your policy a year in advance, which means you can effectively lock in last year’s cheaper price for the next 12 months.
Energy prices
New ‘pricing safety nets’ will come into effect in July this year but consumers will get the first indication of what could come when regulators release their draft decisions in early March.
The Default Market Offer (DMO) acts as a cap on what energy retailers should charge consumers for a standing offer electricity plan in New South Wales, South East Queensland and South Australia, and the ACT.
Meanwhile the Victorian Default Offer (VDO) is considered a fair price for a standing offer electricity plan, to help consumers discern whether they are on a good deal or not.
Recent reports of higher-than-normal demand for electricity, triggered by extreme weather conditions on the east coast, are an early indication that prices could increase this year.
We haven’t seen demand like this for nearly a decade and that volume has been compounded by reduced coal availability and transmission issues.
Higher wholesale prices could mean bigger bills for households. When the government rebates finally start to roll out, the difference could be a real rude shock.
It’s important to remember, while the DMO provides a safety net for consumers, there are often much more attractive deals on offer for consumers who are willing to compare and switch providers.
