Belfast Telegraph

Thursday 25 December 2014

Households face energy price hike

The latest energy price rise comes at a time when UK households are turning up the thermostat
The latest energy price rise comes at a time when UK households are turning up the thermostat

Four million households will feel an extra chill on their finances when their energy tariffs are hiked - as temperatures remain at sub-zero across much of the UK.

E.ON is the last of the big six energy giants to increase its tariffs this winter, meaning that its typical standard dual fuel customer paying by cash or cheque will see their bill rise by around £110 a year to £1,370.

The latest price hike comes at a time when households up and down the country are turning up the thermostat, with forecasters saying Britain will be coated in up to 10in (25cm) of snow today.

Comparison website Confused.com said that the recent increases have widened the gap between the cheapest tariffs on the market and the standard deals being offered by the big six companies to more than £300 a year.

Two years ago, customers on standard dual fuel tariffs were paying up to 23% or £221 a year more than those on the cheapest deals, but the latest round of hikes has increased the price gap to almost a third (30%) or £312, the website said.

The energy price gap was calculated by working out the cost for an average dual fuel user if they were on the cheapest tariff on the market and paying by monthly direct debit. Researchers looked at the difference between this and what someone on a typical standard dual fuel tariff from one of the big six energy companies would pay, if they were covering their bills quarterly by cash or cheque.

E.ON's announcement last month that it planned to put up its prices followed a string of similar confirmations from SSE, British Gas, npower, Scottish Power and EDF. Having pledged in May to keep residential energy prices on hold during 2012, E.ON blamed the new year hikes on increased costs that make up energy bills, including the price of energy on the wholesale market and regulatory costs. E.ON's average dual fuel bill will increase by 8.7%, with electricity rising 7.7% and gas by 9.4%.

According to research by MoneySupermarket.com, households typically use around 40% of their annual energy consumption during the winter months, making the next average quarterly standard bill likely to be well over £500.

MoneySupermarket has also conducted new research looking at the savings which could be made by consumers regionally in switching to the best energy deal. It found that people living in the South East could potentially make the biggest saving out of the 14 regions it looked at across Britain. People living in the South East who have never switched could save £385 by moving from their traditional energy supplier to the cheapest deal.

Bill payers in North Wales and Liverpool who are still customers of their original energy supplier were found to have the highest typical annual bills of £1,444 for their gas and electricity and they could save around £306 by switching, MoneySupermarket found.

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