The cost of energy is soaring as some of the UK’s major suppliers recently announced price hikes. The move could push millions of households into fuel poverty and to the brink of energy debt.
The domino effect has well and truly started as four of the major six energy suppliers have announced price hikes, coming into effect this winter. Only E.ON and EDF Energy are yet to make their move, however time will tell.
Propertywide could help you get a cheaper tariff by comparing energy suppliers online.
British Gas is the UK’s largest supplier of energy and has raised its prices for both types of fuel by an average of 6%. This is going to add an extra £80 to the annual dual fuel bill to the total of £1,238.
Some 8.5 million households will be affected by the price hike which comes into force on 16 November. British Gas customers on fixed price contracts will be unaffected.
Phil Bentely, managing director of British Gas, claims that 85% of the price that the energy firm charges customers is outside of its control.
“Britain’s North Sea gas supplies are running out and British Gas has to pay the going rate for gas in a competitive global marketplace,” he said.
The average cost of delivering energy to homes has increased by £25 over the last year and is expected to rise by a further £40 in the next year.
Within hours of British Gas announcing increases to its price of gas and electricity, Npower did the same.
Npower will increase the price of gas by an average of 8.8% and electricity by 9.1% from 26 November.
Gillian Guy, Chief Executive at national charity Citizens Advice said: “Npower’s price hike will be a big blow to hard-up households. Rises in fuel costs are eating away at people’s earnings forcing them to make really difficult choices about whether they have a warm home, put food on the table or fill up the car in order to get to work.”
Southern and Scottish Electric (SSE)
SSE was the first of the ‘big six’ energy suppliers to announce a price hike. The energy giant increased prices by 9% for its gas and electricity customers which came into effect earlier this month.
As a result, a customer on the average standard dual fuel bill will pay an extra £102 a year or £1,274 in total.
3.4 million gas and 5 million electricity customers will be hit with the higher energy tariff this winter, but the firm claims they will not increase prices before the second half of 2013.
SSE chief executive Ian Marchant said: “We pledged last summer to cap our energy prices for as long as possible and until at least August 2012, and then in January extended this pledge to October 2012.
“Unfortunately, the increases in costs that we have seen since making this pledge can no longer be absorbed and mean that we are unable to keep prices at their current levels beyond this autumn.”
SSE did cut the price of its gas by 4.5% in March but this will give homeowners little relief as they are hit with higher energy bills during the winter months when they need it most.
Scottish Power is the latest energy company to announce price hikes following SSE, British Gas and Npower.
Scottish Power has announced plans to increase the cost of its gas and electricity by 7% as of 3 December.
A staggering 2.3 million customers will be affected by the decision, which will increase the average annual dual fuel bill to £1,271.
The company claims that it has had to increase the price for customers because the cost of transporting gas and electricity to homes has risen.
“We work hard to protect our customers and we regret that we have had to announce a price increase,” said Neil Clitheroe, chief executive of retail and generation at Scottish Power.
Switch energy providers
If you’re looking to reduce your energy bills in the near future so you’re not hit with a large bill come January, now could be the time to switch suppliers.
By switching providers you could save hundreds of pounds on your annual dual fuel bill. The leading six suppliers dominate the market but there are hundreds of tariffs to choose from.
It could be well worth shopping around to find one which is better suited to your situation and circumstances.