Cash-strapped households will be left underwhelmed by the paltry price cuts planned by energy suppliers.
Scottish & Southern Energy (SSE) and British Gas dual fuel customers will see their monthly bills fall by around £6 or £7 in the coming weeks.
But this will provide little comfort, given that suppliers hiked annual bills by almost £400 last year.
Meagre savings on offer
SSE will cut its prices by an average of 4% (£32) for gas and 9% (£44) for electricity, but customers will have to wait until well into spring – 30 March – for the new rates to reach them.
According to price comparison site uSwitch, the average household bill for a dual fuel SSE customer will drop from £1,259 to £1,193, but this is still £318, or 36%, higher than the average bill of £875 last January.
Similarly, British Gas plans to cut the cost of gas for its customers on the 19th February by 10%, shaving £88 off bills, while electricity customers won’t benefit at all.
After the cut, customers will still be paying £328 (36%) more than a year ago.
Sharp falls not reached customers
While these falls are no doubt welcome, they fall well short of what customers were hoping for, given that the price of crude oil, which gas prices tend to track, has fallen by two thirds since its summer peak.
"Lower wholesale energy prices are now slowly but surely drip feeding through to lower household energy bills,” says uSwitch consumer policy director Ann Robinson.
”The only question mark remaining is over how low suppliers will go and whether consumers are going to be left feeling empty handed.”
Cold winter hasn’t helped
The high tariffs have proved particularly painful for customers, given the particularly frosty winter we are enduring.
“Price cuts are now looking increasingly unlikely to help households struggling to keep warm through current arctic conditions,” says Robinson.
“The UK last saw such cold weather in 1991 when the average household was spending £569 a year to keep warm. Today, however, households are facing an annual average fuel bill of £1,267 a year.”
Cut your bills now
If you’re looking to minimise the impact of energy bills on your budget, there are a few simple steps you can take.
Switching energy suppliers is a good place to start. Given that suppliers tend to announce price changes at a similar time, it may be worth waiting until all suppliers have done so before searching for the best deal in your area.
You should also ensure you switch to a supplier’s online tariff (rather than the standard tariff) and pay by direct debit.
Insulation is another handy cost saving initiative. The cost of fitting loft or wall insulation has not increased dramatically in recent years, but the sky-rocketing cost of energy means the potential savings have.
