Electric Ireland, BofI and Irish Life Health to increase prices

In recent days one of the State’s leading banks, the largest electricity provider in the country and one of the three private health insurance companies rolled out price changes which will mean more than a million people paying more for their services from the beginning of October.

While the impact of the price increases and changes to charges may be minimal when looked at on an individual basis, they will add up.

It also seems inevitable that other providers will follow Bank of Ireland, Electric Ireland and Irish Life Health in rolling out increases in the weeks ahead.

One of the first price rises that will hit home is one imposed by the State. The Public Service Obligation levy which appears on all electricity bills with the aim of boosting the development of renewable energy supplies will jump sharply from October 1st.

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An increase in the levy of more than 120 per cent means that electricity bills will climb by €44 next year. As of now the levy is €38.68 or €3.22 per month but it will increase to €96.24 or €8.01 month.

On top of that, more than a million Electric Ireland customers will pay, on average, €2.88 extra on their electricity bills every month starting in October as the company imposes a price increase of 3.4 per cent.

Electric Ireland blame the increase on costs affecting the broader electricity system and market which effectively means the company has decided to pass increased network operator charges on to the consumer. It seems inevitable that other providers will follow suit as winter looms.

One way consumers can offset any price hikes rolled out by providers is to switch to a rival although, according to the regulator in charge of setting prices for energy, the majority of Irish people consistently fail to exploit an increasingly competitive energy market by not switching suppliers. Customers who switched or renegotiated every year for the past four years could have saved €1,097 on the cost of electricity and just over €700 on gas by moving supplier.

Customers who use more energy will make even more substantial saving.

Meanwhile, consumers of Irish Life Health will also be facing price increases in the weeks ahead with the company set to raise the cost of premiums by an average of 2.5 per cent in a move which will add about €30 a year to a typical adult policy. Some policies will climb by nearly 7 per cent while a household with a family policy could end up being worse of by about €100.

As with the energy market, the heath insurers – which effectively had three months off paying any claims this year as a result of the coronavirus crisis during which all private hospitals were subsumed into the public sector between April and June – all tend to move in the same direction when it comes to pricing so increases from the VHI and Laya Healthcare are likely if not inevitable.

There are other charges with which people have been hit due to the public health crisis. Private hospitals have started imposing fees of as much as €275 for carrying out mandatory Covid-19 tests on patients ahead of treatments.

Dental surgeries have also been passing on what they say is a significant spike in personal protection equipment costs to their patients. Smiles, the largest chain in the State, imposes fees of between €6 and €18 per visit depending on the nature of the treatment.

What about mortgages?

Meanwhile almost 86,000 mortgage holders who took payment breaks introduced by lenders in March will also be find themselves paying more over the lifetime of their mortgages as a result of higher interest charges imposed when the payment breaks come to an end. While the charges will vary wildly depending on the size of a mortgage, the duration and the interest rate many people will see what was euphemistically called a mortgage holiday in some quarters costing them in excess of €1,000 over the term of their loan.

Bank of Ireland has also announced a change to its bank charges which will mean it imposes a flat fee of €6 instead of the €5 per quarter charge that is in place.

While on the surface that may look like a massive increase, the reality is it will mean many customers pay less. In addition to introducing the flat monthly fee, the bank is also scrapping its multitude of transaction fees for such things as ATM usage and over-the-counter interactions, so heavy users will benefit the most.