News Archives - Page 2 of 356 - Pat Carroll PCCO - Chartered Accountants & Tax Advisors

NAMA increases projected lifetime surplus to €4.25 billion from €4 billion

The National Asset Management Agency (NAMA) now expects to provide an overall surplus to the Exchequer over its lifetime of €4.25 billion, up from the previous estimate of €4 billion.

The body will provide a further payment to the exchequer of €300m this month and it hopes to make an additional contribution of €500m during the second half of the year.

NAMA has already given €2.2 billion to the state over the past year, meaning than by the end of this year its total contribution should have reached €3 billion.

It said the additional €1.25 billion will be transferred to the Exchequer in subsequent years.

“The strength of NAMA’s continued profitability has allowed the board to increase the agency’s projected lifetime surplus to €4.25 billion,” said NAMA chairman Aidan Williams.

“This is a remarkable achievement that will provide valuable financial resources for the State and allow everyone to share in a dividend from NAMA,” Mr Williams said.

A further €400m in corporation tax has also been paid so far by the agency.

“I welcome NAMA revising upwards its projected lifetime surplus from €4 billion to €4.25 billion with €2.2 billion of this having already been transferred to the Exchequer,” said Finance Minister Paschal Donohoe.

“This highlights the positive work which NAMA continues to undertake despite the challenging economic environment which it has been operating in over the past 12 months,” Mr Donohoe said.

The body, set up in 2009 to clean the property crash related debts from the balance sheets of the main Irish banks, recorded an after-tax profit of €192m last year, its tenth consecutive year in which a surplus was achieved.

At the end of March this year, 173 debtors remained under its management, with 103 in support or forbearance strategies and 70 the subject of enforcement action.

“We remain resolutely focused on managing our remaining assets with one overriding goal – generating the greatest achievable financial return in accordance with the mandate given to us by the Oireachtas,” said Mr Williams.

So far NAMA has delivered 20,000 new homes, 12,800 of which were funded by the organisation itself, with the balance delivered indirectly.

An additional 1,400 homes remain either under construction or approved for funding, while 4,600 more have planning permission.

Planning applications for a further 7,400 have either been submitted or are being prepared.

NAMA’s original aim to provide 2,000 social housing homes has also been exceeded by 30%.

The agency recently sold an 80% stake in its Poolbeg site in Dublin for €200.1m.

Project Pembroke is expected to yield 3,800 homes, including 950 social housing units.

Launching its annual report for 2020 today, NAMA said that at the end of last year its €32 billion deleveraging programme was 97% complete.

The value of its remaining debtor loans stood at €0.85 billion at the start of the year.

€0.92 billion in cash was generated last year, bringing the lifetime total so far to €46.6 billion.

Last year also saw the redemption of the final portion of its €31.8 billion debt in March.

In relation to the Dublin Docklands Strategic Development Zone, NAMA said 42% of its original interests have been completed and sold.

Construction is underway on a further 588,000 sq ft of commercial space and 195 residential units.

“While many challenges remain, we aim to continue generating profits for the State while successfully delivering much-needed new homes; social housing; office and commercial space; and major projects in the Docklands and Pembroke that will leave a lasting positive legacy for decades,” Brendan McDonagh, NAMA’s chief executive, said.

Mr McDonagh said recent Government changes to the rules around bulk purchases of homes by investment funds don’t really effect NAMA.

He said the agency has primarily been delivering houses in recent years that are aimed at the first time buyer market where demand remains strong.

Some of the sites that NAMA is disposing of are sites for apartments, he added, and are commercially challenging in terms of viability.

But people buying those sites are going to have to make an assessment about what they are going to do, he added.

Article Source – NAMA increases projected lifetime surplus to €4.25 billion from €4 billion – RTE – Will Goodbody

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ECB lifts euro zone growth and inflation projections

The European Central Bank has raised its growth and inflation projections for this year and next as the euro zone economy started to roar back to life after over a year of restrictions to curb the coronavirus pandemic.

ECB President Christine Lagarde also said the ECB saw risks to growth as “broadly balanced”, a shift away from the ECB’s long standing assessment of risks as tilted to the downside.

In what it describes as the baseline scenario, the ECB expects GDP to expand by 4.6% this year, above the 4% seen in March, while growth next year is seen at 4.7% against the ECB’s previous 4.1% projection.

Its inflation forecast for this year was raised sharply, mostly because of higher commodity prices.

But consumer price growth beyond 2021 is seen remaining well short of the ECB’s almost 2% target, the fresh figures show.

Inflation is now seen averaging 1.9% this year, above the 1.5% projected in March, while in 2022 it is seen at 1.5%, against an earlier projection for 1.2%.

Christine Lagarde said underlying inflation was expected to increase gradually but that price pressures would remain subdued and slack in the economy would keep inflation below the ECB’s target of just under 2% up to 2023.

She said the ECB expected economic activity to accelerate in the second half of 2021 but that the course of the pandemic and responses to it would continue to dictate the pace.

Inflation would rise further in the second half of the year before falling back as transitory factors fade, Lagarde added.

Earlier, the European Central Bank said it would continue to run its emergency bond purchases at a higher pace than at the beginning of the year, fearing that any retreat could sharply raise borrowing costs and smother a long delayed recovery.

Just emerging from a Covid-induced double-dip recession, the euro zone economy has relied on unprecedented ECB stimulus.

Policymakers have made clear that they would rather err on the side of caution when clawing back accommodation.

“The Governing Council expects net purchases under the Pandemic Emergency Purchase Programme (PEPP) over the coming quarter to continue to be conducted at a significantly higher pace than during the first months of the year,” the ECB said.

The ECB has bought around €80 billion worth of debt per month under its Pandemic Emergency Purchase Programme this quarter, up from levels early this year but below their peak at the start of the crisis.

Maintaining its long-standing guidance, the ECB said that its €1.85 trillion PEPP would last until March 2022 and it reserved the right to buy less than this quota or increase it as needed to “maintain favourable financing conditions”.

“The envelope can be recalibrated if required to maintain favourable financing conditions to help counter the negative pandemic shock to the path of inflation,” the ECB said.

With today’s decision, the ECB’se interest rate on its main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively.

It also maintained its guidance that it would hold or cut this rate until inflation “robustly” converges with its target of close to – but below, 2%.

Article Source – ECB lifts euro zone growth and inflation projections – RTE

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Central Bank’s Rowland says onus on firms to set the right standards

The Central Bank’s Director General, Financial Conduct, has said that increasing evidence in the financial services sector shows that ineffective culture is bad for business – both for a firm itself and the consumers or investors it serves.

Derville Rowland was speaking at an Institute of Directors webinar today.

Ms Rowland said that firms are responsible for selling their customers products that meet their needs both now and in to the future.

“There is, therefore, an onus on firms to have effective cultures and set the right standards,” Ms Rowland said.

“These standards must be reflected across a firm in every aspect of how it conducts its business, from corporate governance structures to individual accountability; from strategy-setting to product development; from risk management to people management; and from internal challenge to how whistle-blowers are treated,” she added.

The Director General also told the webinar that there is a strong link between diversity and inclusion and culture.

“Firms should rethink their governance structures, processes, policies and procedures including talent management through a D&I lens,” she said.

Ms Rowland also assessed the impact of the Central Bank’s Fitness and Probity regime since it was introduced a decade ago.

She said the regime seeks to ensure that regulated firms and individuals who work in those firms are committed to high standards of competence, integrity and honesty, and are held to account when they fall below these standards.

The regime has been instrumental in the Central Bank’s work in seeking to ensure that the right people occupy key roles in the firms it regulates, she added.

Article Source – Central Bank’s Rowland says onus on firms to set the right standards – RTE

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Supply shortage, rising costs could impact housing affordability – BPFI

A combination of lack of housing supply and rising construction costs could exacerbate property affordability issues in the years ahead, according to the Banking and Payments Federation Ireland.

In its latest Housing Market Monitor, the BPFI says while supply is coming back on stream in the aftermath of the pandemic, it will now likely be at least until the end of 2024 before supply comes close to meeting demand.

The report notes that the mismatch between supply and demand could contribute to a build-up in latent demand in the years ahead.

However, as the supply gap closes, rising input costs could drive future price increases, it concludes.

“Recent supply shortages in construction materials due to the pandemic as well as Brexit have caused significant increases in input prices,” Brian Hayes, chief executive of Banking and Payments Federation Ireland said.

“In addition, with significant capital investment planned by the government on housing output as well as other infrastructure projects such as a major housing retrofitting programme over the next five years, it is likely that input cost pressures will increase, and availability of skilled labour could become an issue,” he added.

Speaking on Morning Ireland, Brian Hayes said that increasing the supply of new homes is key to allowing buyers to “get a foot on the property ladder”.

Mr Hayes said that there is very strong evidence that banks are lending and providing credit to customers, with mortgage approvals up 8% and mortgage drawdowns increasing by 4.5% in the first quarter of this year compared to last year.

Between January and April this year, Mr Hayes said that mortgage approvals are up nearly €4 billion, which shows that there is “a strong pipeline of new lending and credit to developers and to customers”.

The report notes that the current level of mismatch between demand and the supply of homes appears to have brought average sale prices close to the peak of the previous cycle in 2007.

Recovery in construction activity

The Monitor captures a strong recovery in house building activity in the early part of the year, despite public health measures that shut down much of the residential construction sector for the opening months of 2021.

Despite the restrictions, housing completions in the first three months were only 7% lower than in the same quarter of 2019 and 14% more than in Q1 2018.

All non-essential construction sites were ordered to close in early January, with the exception of social housing and some private homes which were almost complete.

Commencement activity – the process of starting to build housing units – picked up strongly in April, the report noted.

Together with a supply of 5,600 units that were started in 2019, and not completed in 2020, the BPFI is anticipating that housing completions this year could match the near 21,000 units completed in 2020.

“Prior to the pandemic, we forecasted that annual housing completions would reach 30,000 units by the end of 2022, however it is clear that we will not reach this level of output until at least the end of 2024,” Mr Hayes said.

The report also contains analysis of Eurostat survey data, combined with loan data from BPFI, the Department of Housing and the Central Bank of Ireland which suggests that the lack of housing supply may be contributing to demographic changes among households.

The figures suggest that the average age of a first time buyer has increased from 31 in 2008 to 34 in 2020.

During the same period, the average age of leaving the parental home has also increased from 25.4 years to just above 28 years.

Article Source – Supply shortage, rising costs could impact housing affordability – BPFI- McGrath – RTE – Brian Finn

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Too early to reconsider 2m rule in workplaces – McGrath

Minister for Public Expenditure and Reform Michael McGrath has said the Government would like to see people return to the workplace as soon as possible, but for now it is about holding on to the gains already made.

Speaking on his way into Cabinet this morning, he said it is too early to say if the two metre social distancing rule could be reconsidered in line with a return to the workplace.

Mr McGrath said the Cabinet will seek to protect tenants impacted by Covid-19 from rent increases and evictions until next January.

Minister for Housing Darragh O’Brien will bring the plan to Cabinet, which will apply to people who are renting but are in arrears and make a declaration that they cannot pay due to the pandemic.

The current protections are due to expire on 12 July.

The Government is also expected to agree plans to restrict upfront payments to a value no greater that two months’ rent.

But a student who wants to pay more upfront for certain types of college accommodation can do so and they will also have to give a maximum 28 days’ notice to end these tenancies.

Tánaiste Leo Varadkar is also set to bring proposals to Cabinet to provide a minimum level of protection to employees, who have no entitlement to company sick pay schemes.

The legislation will state that this does not prevent employers offering better terms or unions negotiating for more through a collective agreement.

The Government will consider these proposals to phase in a statutory sick pay scheme over possibly three or four years.

This will start with a statutory minimum number of days per year from 2022 onwards and it would increase in the following years.

Government sources said the statutory sick pay will be phased in to help employers, particularly small businesses, to plan and manage the additional costs which will be capped.

Around half of employers already provide sick pay but many workers, including some lower paid, have no such protection.

Reporting Micheál Lehane and Samantha Libreri

Article Source – Too early to reconsider 2m rule in workplaces – McGrath – RTE

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Pandemic Unemployment Payment claims at six-month low

The number of people claiming temporary Covid-related jobless benefits fell by 8% to 285,000 this week, its lowest level since December last year, new figures from the Department of Social Protection show today.

Non-essential retail, hotels and outdoor bars and restaurants have reopened in recent weeks following their closure in late December during a spike in Covid-19 infections.

Today’s figures show that 285,265 people received the Pandemic Unemployment Payment this week, a decrease of over 24,000 on last week.

The Department of Social Protection said it issued weekly payments valued at over €84m to those in receipt of PUP this week.

The sector which saw the largest decrease in the number of people receiving PUP this week was the Accommodation and Food Service with 5,339 fewer people receiving the payment compared to last week.

This was followed by Wholesale and Retail Trade with 4,739 fewer people receiving the payment compared to last week.

Today’s figures show that Dublin was the county with the highest number of people who are receiving PUP this week at 97,189. It is followed by Cork at 27,108 and Galway at 15,684.

Minister for Social Protection Heather Humphreys said today’s figures are very encouraging as they show another sizeable weekly fall in the number of people receiving the PUP as the economy continues to recover and businesses reopen their doors.

“Almost 200,000 people have now closed their PUP claims since February which clearly shows that as sectors reopen, people are returning to work,” Minister Humphreys said.

“As the PUP is paid a week in arrears, people who are returning to work this week will be reflected in next week’s figures,” she said.

“The reopening of our society and economy is going well. As long as we continue to adhere to public health advice, I am confident we will continue to build on this strong progress over the summer months as more and more people return to work,” the minister added.

The new figures also showed that 892 people are in receipt of an Enhanced Illness Benefit payment, compared with 1,095 last week.

The department again reminded workers who are returning to work that they must close their claim for the Pandemic Unemployment Payment on the actual date that they start back at work.

This will ensure that their claim is processed correctly and it will avoid incurring an overpayment that the department will take steps to recover, it added.

Article Source – Pandemic Unemployment Payment claims at six-month low – RTE

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Euro zone economic dip milder than expected in first quarter

The euro zone economy contracted by much less than expected in the first quarter of the year, revised data from the EU’s statistics office showed, with a buildup of inventories and investment offset by reduced consumer spending.

Eurostat said gross domestic product in the 19 countries sharing the euro contracted 0.3% quarter-on-quarter for a 1.3% year-on-year decline.

These compared with estimates three weeks ago of respectively -0.6% and -1.8%.

Italy grew marginally, against a previous estimate of a dip, and France dipped, against an earlier estimate of growth.

Germany was very slightly weaker, while a number of smaller countries were more positive.

Eurostat said rising inventories added 0.7 percentage points to the overall quarterly figure in the three months from January to March and investment and trade each added another 0.1 points.

Falling household consumption, hit by pandemic lockdowns including of shops across Europe, subtracted 1.2 points and government spending was neutral.

The 0.3% GDP contraction comes after a 0.6% GDP quarterly fall in the previous three months, meaning the euro zone economy was in its second technical recession since the start of the Covid-19 pandemic.

Eurostat said also employment fell 0.3% quarter-on-quarter in January-March and was down 1.8% year-on-year.

Article Source – Euro zone economic dip milder than expected in first quarter – RTE

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Is Ireland about to lose over €2 billion a year in tax revenue?

Minister for Finance Paschal Donohoe at the G7 meeting in London

Over the weekend, finance members from the G7 nations backed a move which will could see the introduction of a global minimum corporate tax rate of 15%. The US-backed plan targets tech giants and other multinationals accused of not paying enough tax. However, Minister for Finance Paschal Donohoe, has said that the deal could see Ireland lose over €2b a year in corporation tax revenue. Prof Stephen Kinsella, Associate Professor of Economics at the University of Limerick and chief economics writer with The Currency, gave his analysis on the move to RTÉ Radio One’s This Week. (This piece includes excerpts from the conversation which have been lightly edited for length and clarity – full discussion below).

“What it means is that a US multinational located in Ireland which pays an effective rate of 10% will be forced to pay another 5% back to the United States. It equalises the rates between different counties. Similarly, an Irish multinational based in France which pays an effective tax rate of 5% will pay another 10% on remittances sent back to Ireland. It’s country by country reporting.

“Some of the profits which are booked in Ireland are based on sales which take place in other countries. What that means in effect is that sales which are in, say, Germany should be booked in Germany. Indeed, the research and development levies and IP revenues which should be in the US will return to the US.”

So is Ireland going to lose out on €2 billion as a result of this move? “We often hear that the devil is in the detail, but here the devil is in the dynamic”, explains Kinsella. “The way things have been moving for several years has been towards a kind of tax harmonisation so it’s taking advantage of that dynamic as much as possible that will determine if we’re successful or if we’ll lose out.

“It’s important for people to remember that in 2013 that there were fairly big changes to various regimes and Ireland benefited from them when everyone expected us to lose out. There may be a chance that actually that multinational activity locates more solidly here just because of the way the deal ends up landing. When we come to study the actual detail of the workings out, that’s when we’ll know the hit, if any, is going to be.”

For KInsella, there are three factors yet to be decided. “I don’t think we understand three things at the moment. One, we don’t understand the timing of this. We don’t know if we’re going to lose the €2b right away, will it be a bit more, will it be a bit less?

“The second thing, we don’t know the sectoral nature of it. A lot of our foreign direct investment is located in certain sectors and we don’t know which ones will be most affected. The third thing we don’t know is how this will affect the future flow of FDI. Will this affect it in a really big way or small way? Those are the three things I’ll be looking for as the various details of the negotiations come out.”

Article Source – Is Ireland about to lose over €2 billion a year in tax revenue? – RTE

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‘Great to be back’ as outdoor hospitality returns

Publicans have said it is “great to be back” as bars, cafés and restaurants reopened for outdoor service.

Bars, restaurants and cafés resumed outdoor service as part of the latest lifting of Covid-19 restrictions.

Gyms, swimming pools and leisure centres also reopened for the first time this year as part of the easing of other measures.

As a result, thousands of people across the country returned to work.

Local authorities in cities across the country, including Dublin, Cork and Galway, have pedestrianised a number of streets, along with installing additional public toilets and bins as part of efforts to facilitate an outdoor focused summer.

However, people are still being urged to continue adhering to the public health guidelines such as social distancing and avoiding crowds.

Taoiseach Micheál Martin said it was a “very significant day for pubs and restaurants”.

In a video posted on Twitter, he said this “illustrates the continuing progress” being made to reopen society and the Irish economy.

Michael O’Sullivan, one of the owners of Clancy’s Bar on Princes Street in Cork, told RTÉ’s News at One that “it’s what we do best, hosting and dining and entertaining people, it’s lovely to have them back”.

Mr O’Sullivan said they have been very lucky that their staff members who wanted to return were able to do so.

Minister for Justice Heather Humphreys has said gardaí will engage with local authorities, businesses and community groups to ensure that the hospitality sector can re-open safely and stay open safely.

It comes in the wake of several arrests in Dublin and Cork over the weekend for public order offences connected with outdoor socialising.

“Our pubs, restaurants and cafes are the businesses which have been hit the hardest by the pandemic,” she said.

“The Government will support them in every way we can as they welcome customers back.”

The easing of measures marks the latest phase in the reopening of the economy and return of social activity.

Cinemas and theatres can reopen, as can gyms, swimming pools and leisure centres, for individual training only.

Guests attending a wedding celebration or reception can increase to 25, while the numbers permitted at organised outdoor events can increase to 100 – or a maximum of 200 – in venues with capacity for 5,000 people.

Matches can also recommence, while outdoor amusements, theme parks and funfairs can reopen.

Among the other changes include the partial resumption of driver theory test services, while an unvaccinated household can have visitors from one other unvaccinated household indoors.

Steve Barry, the manager of Dennehy’s Gyms in Cork city, said they opened at 8am and people were queuing to get in.

Speaking on RTÉ’s Morning Ireland that it’s “a big day for us”, especially as they have just opened their fourth gym locally.

Mr Barry said they want people to enjoy the experience of coming back to the gym.

Bríd Looby, the national operations manager for Odeon cinemas, described the reopening of cinemas as a “phenomenal day” for them.

She said extra health and safety measures include limited seating for each film with unoccupied seats between different groups to meet social distancing guidelines as well as staggering screening times to reduce queues.

As restrictions ease from today, this week will also see four pilot live events take place with crowds.

The first of these is on Thursday, where 500 people will attend a concert at the Iveagh Gardens in Dublin.

Following this, three sporting events will take place on Friday.

Leinster will play Dragons at the RDS with a crowd of 1,200 people; Shamrock Rovers will play Finn Harps at Tallaght Stadium in front of 1,000 people, while Cork City will play Cabinteely at Turner’s Cross in front of 600 people.

Article Source – ‘Great to be back’ as outdoor hospitality returns – RTE Fergal O’Brien

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Household energy bills are rising – get ready to switch

This time last year, energy prices were just starting to recover from the record lows reached in the weeks before.

Worldwide lockdowns at the onset of the pandemic saw international trade practically grinding to a halt.

Economists and analysts were predicting the most severe downturn since the Great Depression in the 1930s.

Oil prices in the US actually went negative for a time.

As a result, energy prices fell precipitously, but what a difference a year can make.

Oil prices are now back at their pre-pandemic levels – helped along by a few intermittent crises such as the Suez Canal blockage and a cyber-attack that saw a key oil pipeline in the US shutting down for over a week.

Coal and gas prices have also been rising.

In tandem with those moves, home energy providers have been hiking their prices with some moving more than once in recent months.

And with the introduction of smart metering and more people getting their properties insulated (and thus reducing the cost of running their homes), energy companies will be keen to capitalise where they can.

Shopping around is more important than ever.

What makes up the cost of an energy bill?

Almost half of the bill is made up of the fuel generation cost – in other words, the source of the energy.

Despite making great strides towards reducing our reliance on fossil fuels in recent years, around half of our electricity output is still generated from burning gas and up to 15% from burning other fuels like coal and oil.

So, the pricing structure is highly dependent on movements on the commodity markets, which, as already outlined, are all heading in one direction – upwards.

Daragh Cassidy, Head of Communications with the price comparison site, said consumers had been hit with a ‘triple whammy’ of events on this front.

“The lack of wind energy output over the past few months, the shutdown of some back-up power plants for maintenance, and the rise in the price of coal and gas on international markets are just some of the reasons for the increases,” he said.

On top of that, there are the costs associated with building and maintaining the networks to get the energy to our homes.

All the suppliers pay a tariff to the network operators which typically amounts to around a third of the household bill.

For electricity suppliers, there’s the PSO (public service obligation) levy, which is set every year by the Commission for Regulation of Utilities (CRU).

The levy for last year increased to €88.80 (including VAT) from €38.68 the previous year.

The money collected from the PSO levy is now used solely to support the renewable energy sector here.

For gas suppliers, there’s the carbon tax, which was hiked by €7.50 at the start of May to €33.50 per tonne of carbon dioxide.

The remainder of the bills are made up of taxes and the supplier’s overhead costs, as well as a margin for profit.

“Customers are getting a battering from increases in unit prices, increases in the PSO levy (or carbon taxes for gas) and increases in the standing charges,” according to Brendan Halpin, founder of WeSwitchU, a price comparison and switching service for energy customers.

To what extent are prices rising?

In the electricity market, most providers have announced, or already implemented, price hikes of between 4% and 18%.

Electric Ireland, the biggest supplier of electricity, has said it doesn’t intend to increase prices for the time being. However, it did increase its electricity prices by over 3% last October when many suppliers froze theirs.

In the gas market, only Bord Gáis Energy has held prices steady in the latest round with the remaining providers announcing increases of between 4.5% and almost 10%.

“Some of these increases are fairly hefty and will hit households hard,” Daragh Cassidy pointed out.

“Energy prices are notoriously volatile so there’s no guarantee households won’t be hit with further increases later in the year unfortunately.”

And indeed some have already moved again.

Both Panda Power and Flogas announced a second round of hikes effective from later this month.

In a statement, Flogas said the price rises were as a result of the significant and continuing increases in wholesale energy costs.

“April 2021 saw the highest wholesale electricity prices since the new Single Electricity Market commenced in October 2018,” the company said in a statement, adding that ‘higher than usual prices are likely to continue for some time’.

It’s worth noting that we already have the fourth highest electricity prices and the seventh highest gas prices in Europe.

So, where are the savings to be made?

Like other utility providers, energy companies rely on a degree of inertia from their customers – or, to put it another way, some misplaced loyalty.

Electricity and gas suppliers tend to offer attractive introductory rates to get customers onto their books, but they generally hike the costs significantly after those periods conclude so it pays for consumers to be nimble and act every 12 months to avoid paying costly bills.

“It’s what I call the tease and squeeze model,” Brendan Halpin said.

“The supplier will tease you with the discount which you lose after 12 months. The only way to save money is to switch every year and that’s where a lot of people fall into the trap. They switch on year one and then forget about it and then they’re back onto the standard rate.”

It’s estimated that about six in ten householders have remained with their suppliers over the past five years.

That’s about a million households that are paying standard, or elevated, unit rates for their gas and electricity.

According to the energy regulator, the average consumer who switches utility providers every year and pays discounted rates could see their annual energy bills falling by €400.

Depending on the size of the house and its BER (Building Energy Rating), the potential savings could be even greater.

If the savings are so significant, why don’t more people switch?

It is surprising that more people don’t switch, but perhaps the recent hikes will give householders pause for thought and focus minds on making savings.

Moving energy providers is probably the most straightforward of all the utilities and there’s plenty of choice with 13 different suppliers in the market.

“You get exactly the same product when using and paying for your energy, although the customer service will differ,” Eoin Clarke, Managing Director of price comparison site said.

“By paying more you are simply giving away more of your hard-earned cash than you need to.”

Brendan Halpin said a large proportion of consumers who do make the switch simply forget to do so again a year later.

“They don’t really see it because the bill comes every two months. There are often estimated readings, which was really a problem during the pandemic, but it’s something customers simply have to keep an eye on.”

WeSwitchU offers a service whereby they make the switch on behalf of consumers who have registered with them.

They find the most suitable plan for the consumer upon joining, they monitor the household energy usage over the 12-month period and then recommend the best plans to move to at the end of the year.

Needless to say, it is not a hugely popular service among the energy providers as the consumers are constantly moving, but for consumers the savings can be significant.

WeSwitchU operates by charging a percentage of the savings that consumers make.

Shouldn’t householders be trying to reduce energy consumption?

This is the ultimate aim.

By switching to renewable sources of energy and making homes more energy efficient, we’re helping to reduce the amount of carbon dioxide that’s being released into the atmosphere through energy generation.

And with the introduction of smart metering, householders are being rewarded for making more energy efficient choices.

Which means that providers will make up the difference by effectively penalising those householders who don’t.

Although there are very attractive grants and supports available to make homes more energy efficient, not everyone is in the position to make such an investment.

However, there are simple changes that people can make to reduce their energy consumption, such as blocking drafts through doors and letterboxes, turning off appliances at the plug, and bleeding the radiators.

“If you’re working from home, check if your employer will contribute towards your bills. If not, you may be eligible for tax relief,” Eoin Clarke suggests.

Should renewable sources not make energy cheaper?

This is what baffles a lot of people.

At a time when more wind and solar power plants are appearing on the landscape, why are energy prices not falling?

Wind and sun, after all, come free of charge.

The government intends to have 70% of Ireland’s electricity generated by renewable means by 2030, the bulk of it coming from wind and solar.

But that requires a significant investment in the infrastructure, the cost of which is estimated at between €500 million and €2 billion.

That will be funded through higher tariffs on providers, which will ultimately be recouped from the consumer though higher prices.

And then there’s the requirement for an alternative supply if nature doesn’t cooperate.

“The problem with renewables is that it’s intermittent. You always have to have a backup,” Brendan Halpin explains.

“If the wind doesn’t blow, you’ve to use a conventional power station. They’re mainly driven by gas. If the price of gas goes up, generating that electricity is going to cost more.”

In short, it doesn’t look as if energy prices are going to fall any time soon. In fact, they are likely to keep on rising.

The solution – aside from making some changes to reduce consumption – is to monitor the market and keep on switching.

Article Source – Household energy bills are rising – get ready to switch – RTE – Brian Finn

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