E.ON to hike energy prices this Saturday

The supplier is the last of the big six energy suppliers to raise its gas and electricity prices

E.ON should be the last of the big six to increase prices this winter

E.ON should be the last of the big six to increase prices this winter

E.ON will be raising its energy prices by £45 or 4% for standard direct debit customers and £14 or 1.1% for cash and cheque customers this Saturday.

Unlike the majority of the big six, E.ON anticipated government cuts to green levies when it announced its price rise and consequently will not be making any further cuts.

This approach means that customers on fixed price plans will not see any changes as a result of the price reductions, as the lower price hike will only affect those on variable tariffs.

No more price rises until 2015?

Each of the big six has stated that there will not be any price rises until 2015, unless factors beyond their control, such as wholesale price increases or higher distribution charges, require a change.

Of the UK’s largest energy providers, three – EDF Energy, ScottishPower and SSE – have yet to implement price cuts in line with the government’s reduction to green levies. ScottishPower’s customers will have to wait until the end of January, npower’s until 28 February and SSE’s until the end of March.

Have the price cuts wiped out the price rises?

Government led price cuts have led to some confusion about whether or not consumers will find themselves better off regardless of winter price rises.

The quick answer is no. Most households will end up paying an extra £50 a year, as price hikes outweigh price cuts by a wide margin.

Supplier

Pre-hike bill

Post-hike bill

Hike effective

Bill after levy reduction

Cut effective

Reduction for fixed and variable?

Holding prices?*

British Gas

£1,191

£1,306

23/11/2013

£1,265

1/1/2014

Yes

Yes until Summer 2015

EDF Energy

£1,190

£1,237

03/01/2014

£1,237

N/A

No

Yes until 2015

E.ON

£1,226

£1,240

18/01/2014

£1,240

N/A

No

No guarantee but says  ‘likelihood  has receded for next 18 months’ (Spring 2015)

npower

£1,220

£1,332

01/12/2013

£1,299

28/2/2014

No

Yes, until Spring 2015

ScottishPower

£1,230

£1,325

06/12/2013

£1,284

31/1/2014

Yes, in part**

Yes, until 2015

SSE

£1,211

£1,304

15/11/2013

£1,259

24/3/2014

Yes

Yes, until Spring 2015

Average

£1,212

£1,291

£1,264


Source: uSwitch.com
Based on a medium user consuming 3,200 kWh of electricity and 13,500 kWh of gas on a standard dual fuel tariff, paying quarterly by cash and cheque, with bill sizes averaged across all regions. *Unless there are significant increases in wholesale costs. **Those on a fixed price tariff paying more than standard tariff prices will see a reduction on 31st January. 3% of fixed customers saw a reduction.

‘Worrying that many consumers are being forced to wait until March for [price] reductions’

Ann Robinson, director of consumer policy at uSwitch, said: “Thankfully, price hike season looks to be over, at least for this winter. But, it is still deeply worrying that many consumers are being forced to wait until March for their supplier to pass on the Government’s levy reductions. These cuts were supposed to bring consumers much-needed relief so it is unacceptable that winter will be over before some finally get to see lower prices.

“However, the reality is that even after all the suppliers have cut their prices consumers will still be left paying over £50 a year more for their energy than in January 2013[2]. This is why consumers have to start helping themselves by moving to dual fuel and direct debit and shopping around for a far more competitive deal. There is almost £300 difference between the cheapest and most expensive tariffs on the market[3], which means there is significant scope for consumers to give themselves a real price cut, especially if they look outside of the big six.”

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