npower customers are finally about to benefit from a 2.5% cut to their bills, following the Government’s levy reductions announced early December last year. The price cut on the 28th February will shave £33 a year off the average npower dual fuel energy bill, bringing it down from £1,332 to £1,299 a year. In line with other suppliers, a further £12 rebate will be made to bills later this year.
The move still leaves npower customers paying £79 or 6.5% more for energy than in January 2013. It also leaves just SSE to pass the benefit of levy reductions on to customers. SSE’s cut is planned for March at the end of its financial year.
Research from Uswitch.com, the independent and impartial price comparison and switching service, shows that the levy reductions have been a damp squib for consumers. Two thirds of consumers (66%) are disappointed by the level of reduction they will see to their bill, while just 6% feel that the way reductions have been passed on is fair. Over eight in ten (84%) say that suppliers have made the process too complicated. Three quarters of consumers (75%) expect that energy prices will go up again this year.
Ann Robinson, Director of Consumer Policy at Uswitch.com, says: “The levy reductions are filtering through to household bills, but for many consumers it’s too little, too late. While British Gas customers benefitted from the 1st January, npower’s customers will only now feel some respite while SSE customers still have to hold on until the end of March.
“This hasn’t just taken the sheen off what should have been a good news story for consumers, but it has also meant many missing out on a potential lifeline when it comes to this winter’s heavy fuel bills. Almost three quarters of 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. For these a timely reduction, no matter how small, could have made a significant difference.
“However consumers can, and should, also help themselves. There is almost £300 difference between the cheapest and most expensive tariff on the market, which many consumers could easily enjoy simply by ditching old-fashioned and expensive big six standard tariffs and moving to a ‘best buy’ deal. This saving far outstrips the levy reductions and adds up to a significant cut to the average household energy bill – I would urge consumers to take advantage and to shop around now.”
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 npower’s 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: ‘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.’
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Uswitch is the UK’s top comparison website for home services switching. Launched in September 2000, we help consumers save money on their gas, electricity, broadband, mobile, TV, and financial services products and get more of what matters to them. Last year we saved consumers over £373 million on their energy bills alone.
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