Energy bills 31% higher than 2008, despite price cuts

Energy bills 31% higher than 2008, despite price cuts

The price reductions from the 'Big 6' energy suppliers over the last two years average out at £102 or 8% of the average household energy bill, which now stands at £1,191, while the average in January 2008 was £912.

The price rises of 2008 added an extra £4.3 billion to household energy bills in the UK, but the two rounds of price cuts that have happened since then have only cut £1.2 billion back off.

(Bill sizes based on a medium user profile (20,500kWh of gas 3,300kWh of electricity per annum). Bill sizes averaged across all regions. Customer taking a standard Dual Fuel plan, paying on receipt of bill.*Based on price cut announcements rather than rate cards.)

Ann Robinson, Director of Consumer Policy at uSwitch.com, commented: "This dip in energy prices will seem like a drop in the ocean to cash strapped consumers, especially as most of the cuts this year came too late to help people with their winter bills.

"Households are still struggling to get to grips with the impact of 2008's 42% or £381 price hike.

"When this is coupled with the effect of a particularly hard winter you can see why some may be left feeling let down."

Energy suppliers have been able to cut their gas prices largely because of low wholesale gas prices; there has been little change to electricity prices, despite the fact that some household electricity is generated by gas fired power stations.

npower is the only supplier to make a change to prices for standard electricity customers, although it has not cut prices as such, but rather boosted the discounts available to monthly direct debit electricity only customers, which works out as equivalent to a 4.8% cut.

ScottishPower is also helping 60,000 vulnerable customers who heat their homes with electricity by way of a new £50 winter rebate.

The story is somewhat more positive when it comes to online plans - where prices have been cut by an average of £213 or 19%; however, in spite of this just 5% or 1.3 million households are on an online plan.

Ann Robinson added: "My advice to those who were relying on price cuts to bring their energy bills down to a more manageable level is to shop around.

"While suppliers have cut their standard prices by £102 or 8%, they have reduced online prices by £213 or 19%.

"Online energy plans are now around £300 a year cheaper than standard plans offering us all the chance to bring our energy prices back down to pre-2008 levels.

"I would like to see all households move to dual fuel, pay by direct debit and sign up to an online plan so that they can enjoy lower prices straight away."