Struggling with energy bills: Low-, middle-income households cut back in order to pay utilities

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from MarketWatch:



Struggling with energy bills
Low-, middle-income households cut back in order to pay utilities
By Stephanie I. Cohen
Last update: 10:30 a.m. EDT June 11, 2008

PRINCETON, N.J. (MarketWatch) -- Low-income and middle-income households are dealing with higher energy bills in similar fashion these days -- lowering the thermostat, eating out less, buying cheaper versions of products they need, spending less on clothes and medicine, and even changing their plans for education.

Fuel-oil prices have increased more than 40% in the past year and gasoline prices increased by over a third, leaving many low- and middle-income households struggling to pay their energy bills, according to a new survey by the National Energy Assistance Director's Association released Wednesday.

A majority of households surveyed (57%) said energy bills are higher today than they were a year ago. While the impacts of steadily increasing energy costs are being felt hardest by low-income families -- a family of four making less than $33,300 a year -- plenty of families making between $33,300 and $77,000 say they are feeling the pinch and changing what they buy and how they heat and cool their homes.

More lower-income households reported that their energy bills had increased (63%) than any other economic group. Roughly 60% of low-income households, 49% of moderate-income households, and 42% of middle-income households said it is more difficult for them to pay these bills this year, according to the study.

Gasoline prices hit household budgets the hardest, according to the study. Nearly three-quarters of low-income, 70% of moderate-income, and 61% of middle-income respondents said that increased gasoline costs had a large impact on their budgets.

The two biggest cutbacks across all households are scaled-back purchases of basic household necessities (43%) and smaller food bills (43%).

As prices at the pump continue to climb, at least 65% of respondents of all income groups said they are driving less, while low-income households reported they are much more likely to use public transportation and ride-sharing more.

Low-income households are making sacrifices elsewhere to counter increased home energy and gasoline costs including fewer food purchases (70%), not buying medicine (31%), and altering plans for their education or their children's education (19%). .......(more)

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