E.ON has today announced that it is raising its gas and electricity prices by 8.7% from 18 January. The increase will take its average dual fuel bill up £110 from £1,260 a year to £1,370, making it the most expensive supplier for standard customers.
The move also means that the average household energy bill will reach a new all-time high of £1,352 a year: £251 or 23% higher than in January 2011.
All of the biggest energy suppliers have now announced price rises this year. EDF Energy and ScottishPower’s price rises took effect in recent weeks, whilst customers of British Gas, npower and SSE saw their prices rise in October and November this year.
There are concerns that the recent price rises combined with the arrival of freezing temperatures in the UK could leave households struggling afford their energy costs – cold weather alone is estimated to cost households an extra £7 a week on their energy bills.
Average household energy bills
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Based on a medium user consuming 3,300 kWh of electricity and 16,500 kWh of gas with bill sizes averaged across all regions.
What can you do?
Ann Robinson, Director of Consumer Policy at uSwitch, says:
“E.ON deserves credit for holding out the longest before raising its prices and for at least protecting its customers to the end of this year. But, this hike is still a bitter blow for consumers, who will now ring in the New Year with higher energy costs.
“As winter temperatures plummet, consumers could buckle under the strain of higher energy prices.
“This winter almost nine in ten households (87%) are expected to ration their energy use to save on bills and last winter three quarters of households (75%) went without heating at some point due to cost.
“The fact is that high energy prices have a big impact on consumers and leave many unable to turn on their heating for fear of running up a large bill.
However, she advises a few ‘simple but effective steps’ first:
“We can all cut our energy bills substantially by making sure our homes are as energy efficient as possible and by making sure we are paying the lowest possible price for the energy we use.
“There’s just over £300 a year difference between the cheapest and most expensive tariffs on the market and, if consumers are quick, they might still be able to take advantage of some of the low-cost or free home insulation offers that are around. These are disappearing fast ahead of an end-of-December deadline, but will help you to reduce your consumption, and therefore your bills, for a long time to come.
What has E.ON said?
Tony Cocker, E.ON Chief Executive, said, “We have held back from increasing our prices for as long as we possibly could and at the same time have worked hard to reduce our own costs as a business so that our customers can get the best price possible.
“However, some 16 months after our last price increase, and almost a year since we actually cut our electricity prices, we have had to make the difficult decision to increase our prices.
“In the next few days every customer affected by this price change will receive a letter from us explaining the detail behind this announcement.
“Wherever we can, we will include the likely impact on the customer’s own bill.However, as well as the individual impact, the broader question is not what we are doing but why we are doing it.
“We have worked hard to reduce our own running costs which include tasks such as reading and changing meters, answering queries and managing our customers’ accounts. We also believe our profit levels are fair and will continue to be so. Last year our domestic profit margin was less than 2% and we will make public the amount we make this year when we publish our 2012 results.”
Price changes – To see a full breakdown of the most recent gas and electricity price changes visit our dedicated page.
Cold weather to add £7 to energy bills – See if you’re entitled to a cold weather payment as the mercury drops.