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ENERGY

How much could electricity prices fall by in your part of Switzerland?

There is good news for most households in Switzerland: electricity prices will fall next year at last. But the drops won't be equal across the country.

How much could electricity prices fall by in your part of Switzerland?
Electricity prices will drop in 2025 for most Swiss households. Photo: Pixabay

Due to lower global energy supply after Russia attacked Ukraine in February 2022, energy prices in Europe climbed substantially.

In Switzerland, they increased by 20 percent on average in 2023 and 18 percent this year, taking out a big chunk of many families’ budgets.

However, after these considerable price hikes in the past two years, electricity tariffs will drop by an average of 10 percent in 2025, the Federal Electricity Commission (ElCom) announced on Thursday. 

This means that for a ‘typical’ household, which annually consumes 4,500 kWh, electricity bill will be 141 francs lower compared to 2024.

The reason for this positive evolution, according to ElCom, is that “prices on the wholesale electricity market have stabilised somewhat, resulting in a fall in energy tariffs.”

Different regional tariffs

Switzerland’s electricity network is highly decentralised, with about 600 different distributors.

For that reason, price disparities among Swiss electricity suppliers are significant, so the amount of the decrease will depend not only on your place of residence and the size of dwelling, but also on the production capacity of the local electricity provider.

Can you switch to a different (cheaper) power company?

No, private households can’t pick between different power suppliers. You are limited to using the local power company that holds the monopoly for your address.

How much cheaper will electricity be in your community in 2025?

The reduction of 10 percent is an average, which means more or less of a decrease in various communities.

For instance, if you live in canton Zurich, you are likely to pay nearly 13 percent less for electricity, while in the city of Zurich itself, your bill will be only 1.06 percent lower.

In Geneva and its communities, you are looking at a drop of 12.16 percent, while in Vaud, tariffs will be between about 7 and 12.69 percent lower (but only 4.19 percent less in Lausanne).

Basel-City and Basel-Country communities, however, will be a bit less lucky: tariffs there will be less than 1 percent lower.

Residents of many Valais communities, on the other hand, will enjoy a decrease of between 14 and over 17 percent.

But the residents of central municipalities around Lucerne will get the biggest break: they will pay 26.6 percent less than currently.

But there is bad news as well

Tariffs will actually go up for residents of some communities, especially in Solothurn and Schffhausen: their electricity bills will increase by up to …31.8 percent!

You can check out the 2025 tariffs in your community on this ElCom map

In any case, you will be soon receiving a letter from your local provider informing you of the prices in your community.

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For members

PENSIONS

How will Switzerland’s plan to hike VAT affect you?

Since Swiss voters approved a move to pay an extra month’s state pension to retirees, the government has looked into various ways to finance the "13th pension payment" without penalising those who are still employed — in other words, not burdening the current workforce with higher social contributions.

How will Switzerland's plan to hike VAT affect you?

After the vote in March 2024, the Federal Council set out to find the best way to cover the additional pension payout, without putting this financial responsibility on the active workforce.

In August, the government decided to foot the bill for the 13th pension payment by increasing the Value-Added Tax (VAT) — the flat-rate tax that is added to the cost of items you purchase.

The amount of the increase, however, was under discussion.

This week, minister Elisabeth Baume-Schneider, who is responsible for social insurance and compensation scheme, announced the VAT hike is set at 0.7 percent, which means the consumption tax will go up from the current rate of 8.1 to 8.8 percent.

She pointed out that this mode of financing is more equitable, because it means everyone will contribute to boosting the pension coffers, including the retirees themselves.

With this move, the government will collect 450 million francs to bankroll the cost of the 13th pension when it goes into effect in January 2026. 

How will higher VAT impact you?

You may think that higher VAT will have a negative impact on your finances — as this means the already high cost of living will go up even further.

Keep in mind though, that you will benefit once you retire and will receive the 13th instalment too.

And if you decide to leave Switzerland, your pension contributions go with you — a simple procedure if you are a citizen of EU /EFTA, and slightly more complicated (but doable nevertheless) if you go back to a third nation.

How much more are you likely to pay?

VAT is the extra charge added to the cost of most purchases, from food and drink to clothing.

But how much more expensive will products and services become with the 0.7-percent hike?

In August, while the Federal Council was still crunching numbers regarding the VAT increase, Frank Marty, a tax expert at the business umbrella organisation Economiesuisse, calculated price increases based on a raise of 0.5 percent. 

He concluded that “in an average household [which in Switzerland means an income of just over 80,000 francs a year], additional 0.5 percent will result in 250 francs going to VAT per year.”

If your salary exceeds the median wage, then you will likely contribute 450 francs a year, but only 200 francs if you are low-wage earner (and therefore a lower spender).

With 0.7 percent, these amounts will be slightly higher.
 

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