Benefits of cheap fuel
- Motorists save £146 a year on average from lower prices at the pump
- We estimate the total saving across all consumers to be £5.3 Bn
- This saving is equivalent to a 1.3p drop in the basic rate of income tax
- It is much more than the saving from recent energy price cuts, estimated to be around £0.5 Bn
- The highest income households can typically expect to save £329 a year
- Male motorists can expect to save £175 a year, compared to £114 for female motorists
- North/south divide in benefits from lower prices at the pump
- The average Londoner benefits least from the price falls
- 3 stocks which stand to benefit from greater consumer spending power
CHEAP fuel prices are as good as a 1p cut in income tax, latest market analysis has revealed.
And financial experts are predicting a surge in consumer spending thanks to the cash injection into family budgets of lower car running costs.
Investment specialists Hargreaves Lansdown has conducted an analysis of the savings say the research shows the saving should have a positive impact on the UK economy.
Laith Khalaf, senior analyst, said: “Falling fuel prices will deliver substantial savings to the UK public, in aggregate more than a 1p cut in income tax would. This is an adrenaline shot delivered straight to the heart of the UK economy – the Great British consumer. The average household can look forward to saving almost £200 a year on car travel, if prices remain where they are.
Consumers can do one of three things with the extra money in their pockets; spend it, save it, or use it to pay down debt. In all likelihood we will see a combination of all three, and many UK businesses stand to benefit from the additional revenue generated by higher consumer spending power.”
The price of oil has fallen from $115 a barrel last summer to under $50 a barrel today. This has led to a fall in fuel prices on UK forecourts, with petrol falling from 131 pence per litre in July 2014 to 107 pence today, its lowest level since 2009. Meanwhile diesel has fallen from 136 pence per litre in July 2014 to 114 pence today.
Experts estimate a total saving to UK car drivers of £5.3Bn a year, compared to 2014 costs. This assumes current prices are maintained for the duration of the year.
