SSE’s 8.2% or £106 gas and electricity price hike kicks in this Friday (15th November) – today (13th November) it has revealed a half year operating loss for its retail arm of £89.4 million
Average household bill for a dual fuel SSE customer will now go up from £1,354 to £1,460 a year – however SSE has pledged not to raise prices again before Autumn next year
SSE has partly blamed the increase on Government-imposed levies on energy bills – the Government is now expected to review ‘green taxes’ which could result in a £75 a year reduction on bills
Over eight in ten households (83%) will be rationing their energy use this winter to save on bills.
The winter of discontent begins as the first of Britain’s impending energy price hikes comes into effect this Friday (15th November), says Uswitch.com, the independent price comparison and switching service.
On Friday, the country’s second largest supplier, SSE, is putting its prices up by 8.2% or £106 for gas and electricity, taking its average standard dual fuel bill from £1,354 to £1,460 a year as a result. However, it has pledged not to increase its prices again before Autumn 2014 at the earliest, despite today (13th November) revealing a half year operating loss of £89.4 million for its retail arm.
The increase comes at a time when the National Audit Office warns that energy and water bills will continue to soar for the next 17 years. SSE’s hike is set to be followed by British Gas (23rd November), with npower’s and ScottishPower’s hikes coming into effect in December and EDF Energy following in the New Year. Only E.ON is yet to announce a price increase. The question now is whether it will follow EDF Energy’s lead in pre-empting the Autumn Statement when the Government is expected to review the ‘Green taxes’ on energy bills, potentially resulting in a £75 a year reduction on household bills.
A £75 reduction would reduce, but not eliminate the impact of this round of price hikes, which has added £108 on average onto bills. And, although welcome, the potential reduction would still leave consumers struggling to play catch-up on years of price increases, which have seen the average household energy bill rocket from £522 a year in 2004 to £1,353 a year before this latest round of hikes – an eye-watering £831 or 159% increase in less than ten years.
The impact on consumers is clear – even before price rises were announced, over eight in ten households (83%) said that they would be rationing their energy use this winter to keep their bills down. And this is an on-going trend – last winter almost seven in ten households (69%) went without heating at some point to keep their energy costs down, while over a third (35%) said that cutting back on energy usage was affecting their quality of life or health.
Ann Robinson, Director of Consumer Policy at Uswitch.com, says: “The cost of heating a home this winter is about to get higher and the burden of keeping on top of energy costs is about to get heavier. Consumers already struggling to balance their budgets will be left floundering in the wake of this latest round of energy price hikes.
“While the Government may be about to lend a helping hand, by potentially removing some of the extra levies that appear on our bills, this is unlikely to go far enough to really resolve the fundamental issue of affordability. Bills will still be creeping upwards and even more households will feel compelled to cut down on their energy usage as a result.
“This is why consumers must fight their own corner. They can’t control prices, but they can control the impact on their bill by ensuring that they are paying the lowest possible price for their energy. They can also give themselves a price freeze by signing up to a tariff that protects them from price increases for anything up to four winters. The fact is that there are still vast swathes of people sitting on old-fashioned and expensive standard tariffs paying far more for their energy than they need to. Moving to a more competitive deal could help them better afford to keep their homes warm this winter.
“And switching is only part of the picture – I would also urge householders to reduce the amount of energy they use – not by going cold in the winter, but by making their homes more energy efficient. It doesn’t have to cost money upfront – the Green Deal is there to give advice and support, as well as the finance for those who cannot afford it. These two steps are the best way to keep a lid on bills.”
SSE announcement: October 10th, 2013.
SSE’s interim results announced 13th November, 2013.
Based on a medium user customer using 3,300 kWh of electricity and 16,500 kWh of gas, on an SSE standard Dual Fuel plan, paying quarterly by cash or cheque with bill sizes averaged across all regions.
Source: http://www.telegraph.co.uk/earth/energy/10424118/Green-tax-to-knock-75-off-energy-bills.html
Research was conducted with the Uswitch.com Consumer Opinion Panel in September 2013 amongst 1,250 adults with bill paying responsibility for their household energy. In response to: ‘Are you planning to cut back on the amount of energy you use this winter to make your bills cheaper?’ 51.3% said ‘I am already doing this’ and 31.2% said ‘Yes, I am planning to’. This adds up to 82.5%.
This takes into account increases announced by SSE, British Gas, ScottishPower, npowerand EDF Energy. It is an average of these increases only – E.ON is not included as it is yet to announce an increase.
Based on a medium user customer using 3,300 kWh of electricity and 16,500 kWh of gas, on a standard Dual Fuel plan, paying quarterly by cash or cheque with bill sizes averaged across the big six suppliers and across all regions.
Research conducted with the Uswitch.com Opinion Panel amongst 2,099 respondents in January 2013. In response to: ‘Have you gone without heating this winter to keep energy costs down?’ 31.2% said never, 50.6% said occasionally, 16.5% said regularly and 1.7% said always. This adds up to 68.8% who went without heating at some point. Assuming that each person represents one household and on the basis of 26,442,096 million households in the UK we estimate that 18,192,162 households went cold at some point last winter.
Research conducted with the Uswitch.com Opinion Panel amongst 2,099 respondents in January 2013. In response to: ‘Do you think you’re achieving the right balance this winter between keeping your home warm and managing costs?’ 34.9% said ‘No – the cut backs I’m making are affecting my quality of life and/or health’.
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