The big six energy suppliers have all announced their price cuts, averaging out at 3.7% or £48 a year. You may welcome lower bills, but the price cuts will only have a minimal effect on your household bill as well as fuel poverty levels in the UK.
In 2008 energy prices rose by 42% or £381, adding a total of £4.3 billion in total on to household energy bills. After the price cuts in 2009, the average energy bill will fall from £1,293 to £1,245, wiping out 13% of last year's price increases.
5.4 million households were plunged into fuel poverty last year as a result of huge price rises, and this year's price cuts will only pull 172,000 back out of the trap.
Our research shows that fuel poverty isn't just affecting pensioners, as it becomes a much wider spread problem. While 30% of pensioner households are in fuel poverty, so are 20% of families with one income and 17% of single person working households.
Those who were relying on price cuts to bring their energy bills down to a more manageable level will be particularly disappointed.
Ann Robinson - Director of Consumer Policy at uSwitch
There is a small chance of more price decreases later in the year, but you certainly shouldn't rely on it. Worryingly, energy suppliers are already hinting that there may be price increases in 2010, so you really need to take action and find ways to bring your energy bills down.
Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "Those who were relying on price cuts to bring their energy bills down to a more manageable level will be particularly disappointed. But there could be greater disappointment to come if energy prices start their steady climb upwards again next year."
"While suppliers have reduced prices by £56, you could actually cut your own energy bills by up to £425* just by switching. You should move to dual fuel, pay by direct debit and sign up to an online plan to enjoy lower prices straight away. You should then make it a priority to always pay the lowest possible price for their energy and to use less of it. These two simple steps are everyone's most effective deterrent to soaring energy bills."
See if you could save up to £425 on your gas and electricity - compare and switch today.
* Between 1st January and 1st June 2009, at least 11% of people who switched energy provider with uSwitch.com saved £425 or more.