Major energy companies to cut prices

Energy price rises may not be as severe as first thought

Earlier this year, five of the ‘big six’ energy suppliers announced that they would be making major increases to their prices. In an effort to lessen the impact on consumers the government have announced a new package of plans to bring energy prices down, allowing the energy companies to pass the savings on to consumers.

Don’t expect cheaper bills just yet

Bristish Gas had originally announced that their prices would go up by around £123 for an average dual-fuel customer this winter. They have now said they will cut prices by £53 in January – still a net increase of around £70.

Npower’s prices will be going up by around 10% as expected, but they have promised to freeze any further price-hikes until 2015.

SSE have also said that they will pass on savings of around £50 to their customers. EDF have similar plans.

Overall, your energy bills are still likely to go up – just not quite as much as previously thought.

Where have the cuts been made?

The government are making changes to the ECO funding scheme, the Warm Home Discount and electricity network costs. These changes combined will equate to around £50 worth of savings for an average customer. Free energy saving measures such as cavity and loft insulation will however still be available to qualifying customers – you can find out more about these products and see if you qualify for a grant here.

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Richard Lloyd, executive director of Which? is positive about the move: “It is about time the government started getting the cost of energy under control and this will be a welcome step in the right direction for consumers who are struggling with the increased cost of living. It is right to refocus the Energy Company Obligation so that it gives greater priority to those most in need of help, with lower-cost measures such as loft and cavity wall insulation.”