Tomorrow’s (29th March) price cut from SSE completes a round of reductions from the big six which will save average dual fuel standard plan customers just £30 a year****
F**ollowing the cuts, over 4.7 million households will still be left spending 10% **or more of their annual income on energy – a reduction of just 300,000 homes
A 10% cut to standard tariffs, more in line with record low wholesale energy prices, would lift an additional 1.1 million homes above the energy breadline
Millions of electricity only consumers are yet to see a single reduction, as suppliers continue to refuse to cut standard electricity tariffs
Uswitch.com **is repeating calls for suppliers to urgently pass on double-digit reductions to consumers to reflect falls in wholesale gas and electricity prices.**
Big six energy suppliers have failed to lift 1.1 million homes above the energy breadline by failing to pass on double digit cuts in wholesale energy prices, according to a new analysis by Uswitch.com, the independent price comparison and switching service.
The new figures, published the day before the final big six standard tariff price cut takes effect, reveal that the average standard big six dual fuel bill will fall by just 2.7% or £30 a year.
Before the round of cuts, almost 5.1 million households were spending a staggering 10% or more of their annual income on energy. But, despite wholesale energy falling to a five-year low at the start of the year, the recent reductions will raise just 300,000 homes above the energy breadline. Yet standard gas and electricity tariff cuts of 10% or £120 – more in line with wholesale energy reductions – would benefit an additional 1.1 million households.
SSE’s 5.3% cut to standard gas prices comes into force tomorrow (29th March) and follows similar cuts this winter by big six rivals. But millions of electricity only customers are yet to see a single reduction to standard prices, despite the fact that wholesale electricity costs fell by a staggering 23% last year.
It is estimated that 70% of customers or 18.5 million homes are on standard variable energy tariffs. Rather than relying on this winter’s round of meagre price cuts to save money, switching to cheaper fixed deals are saving the average customer £337 per year – more than at any point since 2009. Ofgem recently calculated that 6.1 million domestic energy supply accounts were switched in 2015, up 15% since 2014 and saving a collective £957 million.
Big six standard variable price changes 2016
| Supplier | Average dual fuel standard tariff before 2016 price cuts | Average dual fuel standard tariff a**fter 2016 price cuts | ||
|---|---|---|---|---|
| British Gas | £1,075 | £1,044 | ||
| E.ON | £1,079 | £1,057 | ||
| SSE | £1,089 | £1,057 | ||
| EDF Energy | £1,100 | £1,069 | ||
| npower | £1,110 | £1,077 | ||
| ScottishPower | £1,113 | £1,081 | ||
| Average big six | £1,094 | £1,064** |
Source: Uswitch.com. Prices based on an average energy consumption on a Direct Debit tariff.
Ann Robinson, Director of Consumer Policy at Uswitch.com, says: “Once again consumers are being short-changed by meagre big six price reductions. Whilst any price cut is welcome, the average big six standard tariff bill has fallen by just £30 a year – less than half a tank of petrol.
“With wholesale energy costs tumbling, it’s hard not to see these cuts as token gestures. Worryingly, they will have little effect in reducing the burden of sky-high energy bills which still affect more than 4.7 million households across the country.
“We urge suppliers to look again at what more they can do to pass on double digit dual fuel reductions to their customers. In the meantime, consumers should take control of their own bills by checking if they can find a better deal by switching energy tariff or supplier.”
Jason Wakeford
Phone: 0203 872 5612
Email: jason.wakeford@uswitch.com
Twitter: @UswitchPR
See table in main body of the press release summarising big six suppliers’ price reductions in 2016. All prices quoted are based on a medium user customer using 3,100 kWh of electricity and 12,500 kWh of gas, on a dual fuel plan, paying by Direct Debit with bill size averaged across all regions and all big six suppliers.
Analysis carried out by economic consultancy Europe Economics. Europe Economics constructed indicators of fuel poverty and vulnerability using the latest income and actual pricing data available at the time of its analysis in January/February 2015. This data related to October 2014. The study is based on a model including around 2,700 representative households. In order to estimate the index, three ONS sources were used:
Family Spending 2014. The report sets out average disposable incomes and spending on domestic energy by disposable income decile, age of reference person band and region or country in 2013. Energy components of the Consumer Price Index. The component for domestic fuels is used to scale up energy spending to October 2014 (the most recent month for which data is available). Average Weekly Earnings. The index is used to scale up disposable incomes to October 2014. While this assumes that disposable incomes rise in line with average earnings, and does not account for benefits changing at different rates and the effects of the tax system, it should be a reasonable proxy over the relatively short period from the 2013 average to October 2014.
Source: ICIS Power Index (IPI) 2016
Total number of households in the UK is 26.4 million (ONS, Families & Households, 2013) x 70% (number of households on standard tariff – source: Competition and Markets Authority) = 18.5m homes.
Average saving per account (gas only/electricity only/dual fuel gas and electricity) of Uswitch.com customers during 2015 was £156.85 x number of accounts switched in 2015 (Ofgem figures) is 6,100,000 = £957m.
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