British Gas and SSE both announced a cut in energy prices today, with British Gas reducing standard electricity prices by 5% and SSE cutting gas prices by 3.8%.
The SSE price cut will take effect from 26 March, and the British Gas electricity cut will take effect from today.
Although SSE’s headline price cut is 4.5%, it is only cutting the ‘unit rates’ for gas. Taking into account their fixed standing charge, the actual cut passed on to customers will be around 3.8%
British Gas says its cut is part of an effort to ‘keep customers’ bills down.’ SSE cited a reduction in wholesale costs as the reason for the change.
Richard Lloyd, executive director of Which? said that the price cuts will be welcomed by customers but warned that ‘with average bills now more than £1300 a year, small reductions of around £30 will not be a solution for those struggling to pay their next bill.’
How much you’ll save
The reductions announced today by British Gas could knock £24 off the annual bill for electricity-only customers, although dual-fuel customers will also see a reduction.
SSE’s price cuts should reduce the average annual gas bill by £28.
A statement from British Gas also says that the move ‘re-establishes British Gas as the cheapest major standard electricity supplier, on average, in Britain.’
Cheapest energy deals
However, a standard deal may not be the cheapest for customers, as it does not include discounts such as those offered for paying by direct debit.
Which? recommends that customers always compare energy deals to find out which is best for them, and look at Which? Switch to help cut their energy bills.
British Gas came joint ninth place with Eon in the Which? Switch energy satisfaction survey, which asks consumers to rate their experience of their gas and electricity companies. 47% of their customers said they were satisfied with the service of the two companies. SSE came eighth, with a satisfaction score of 51%.
The survey reveals the best and worst energy suppliers – find out how your energy company compares.
EDF cuts gas prices
The new reductions come just one day after rival firm EDF Energy announced cuts in gas prices of 5%.
After a mild winter and a drop in wholesale prices, other energy companies will be feeling the pressure to follow suit.
The first price drops this winter were instigated by smaller suppliers Ovo energy and Co-operative Energy. Both companies said a drop in wholesale prices was the reason for the cuts.
Energy company satisfaction
The price cuts come in the same week that Which? revealed huge problems with energy company complaints. Over four million complaints were sent to the major energy suppliers last year, the majority of which were problems with billing or meter reading.
Npower and British Gas both received fines for poor complaints handling from the energy regulator yesterday.
Which? wants Ofgem to be given the powers to force energy companies to report transparently on their complaints, so that customers can see the full picture of energy customer service.
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