ScottishPower’s 3.3% price cut, for variable tariff customers only, comes into effect today. This will bring its average bill down from £1,325 to £1,284 a year. However, new research shows that the Government’s levy reductions have turned out to be a damp squib, with consumers left feeling confused, hard-done-by and still out of pocket:
Less than a quarter of consumers (21%) understand how suppliers’ cuts are being made – just 6% think that suppliers have been fair in how they have passed them on
84% say that suppliers have made the process of levy reductions too complicated – 76% say that the Government should have given more of a steer
All the big six suppliers are making reductions – despite this less than one in ten consumers (9%) think that they will benefit
A third (34%) say that their perception of energy suppliers has changed for the worse, just 1% say it has changed for the better
No hope: 75% of consumers still think that energy prices will go up again this year.
ScottishPower’s 3.3% price cut comes into effect today, making it the 4th of the big six suppliers to pass Government levy reductions on to hard-pressed customers. However, new research from Uswitch.com, the independent and impartial price comparison and switching service, shows that the majority of consumers see the reductions as a damp squib.
What should have been a ‘good news story’ has in fact turned sour. Less than a quarter of consumers (21%) understand how suppliers’ cuts are being made, while 83% think that all customers should have benefitted equally whether on a fixed or variable priced tariff. Just 6% think that suppliers have been fair in how they have passed the reductions on.
But while 84% of consumers think that suppliers were responsible for making the whole thing too complicated, many think that the Government had a role to play too. Three quarters (76%) say that the Government should have given suppliers more of a steer on what was expected of them.
Without strict guidance, the reductions have all been implemented differently, leaving consumers feeling both confused and scorned. While British Gas customers saw the benefit on 1st January, those with npower will have to wait until 28th February and SSE customers must hold on as long as the 24th March – after the depths of winter have been and gone.
This has left consumers unconvinced – less than one in ten (9%) believe that they will benefit from the reductions. In addition, energy providers’ reputations have taken a hit, with a third of consumers (34%) now having a worse perception of their supplier – just 1% have seen their perceptions improve.
Trust also seems to have hit a new low. Despite suppliers making promises to hold off from raising prices again this year, three quarters of consumers (75%) expect that prices will go up again anyway.
This is worrying, given that over seven in ten households (73%) have gone without heating at some point this winter to keep energy costs down while over a third of people (36%) say that cutting back on energy has affected their quality of life or health.
Ann Robinson, Director of Consumer Policy at Uswitch.com, says: “While some consumers might be breathing a sigh of relief today, for many others this whole exercise in reducing energy prices has turned into a damp squib. Across the board, consumers have been left confused and uncertain about whether they will benefit from the levy reductions or not.
“What should have been a ‘good news story’ and an easy win for suppliers has backfired horribly and it is simply unacceptable that many of their customers have missed out entirely or are being forced to wait until after the winter before their bills are cut. Those shivering in their homes today need help immediately and not once winter has been and gone. I strongly urge that suppliers promise to backdate reductions so that consumers are no longer afraid to heat their homes.
“But consumers can also help themselves to ease the burden of their energy bill, by ensuring that they are on the cheapest available deal. With £274 between the cheapest and the most expensive tariff, consumers have a lot to gain by shopping around and seeing what else the market has to offer.”
|
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
|
Cut effective
| | | |
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.
Alexa Wheeler
Phone: 0207 1484 661
Email: alexa.wheeler@uswitch.com
Twitter: @uswitchPR
All research referred to below was conducted with the Uswitch.com Consumer Opinion Panel amongst 1,021 respondents in January 2014.
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.
In response to: ‘Thinking of the reductions that suppliers have made as a result of Government changes to levies on energy bills, which of the following do you agree with….?’
In response to: ‘Suppliers are implementing their reductions in different ways – some customers will see a price cut, some won’t. Do you know/think you will benefit?’ 9% said ‘Yes’.
In response to: ‘Has your perception of energy suppliers changed as a result of the reductions? Choose one:’ 34% said ‘Changed for the worse’, 1% said ‘Changed for the better’.
In response to: ‘The big six energy suppliers have all recently said that they will now hold their prices steady into 2015, unless wholesale prices or other costs change substantially. Which of the following do you expect:’ 75% said ‘Prices will go up again this year’.
In response to: ‘Have you gone without heating this winter to keep your energy costs down?’ 50% said ‘occasionally’, 20% said ‘regularly’, 3% said ‘always’. This adds up to 73% who went without heating at some point this winter.
In response to: ‘Do you think you’re achieving the right balance this winter between keeping your home warm and managing costs?’ 36% said ‘No – the cutbacks I’m making are affecting my quality of life and/or health.’
Based on a medium user: Spark Energy Direct Debit Advance 3 costs £1,025 a year while npower’s standard cash and cheque tariff costs £1,299 a year.
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