Happy New Year! British gas cuts £41 off energy bills

31st December 2013

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It’s a happy New Year for cash-strapped consumers as British Gas becomes the first ‘big six’ energy supplier to reverse at least partly its winter price hike.

After upping prices by an average 9.2% on the 23 November, it will shave 3.2% on average back off again, from tomorrow, 1 January.

The move is in response to the Government changing environmental and social levies that are paid through household energy bills.

The upshot of which is that the average bill for a British Gas cash or cheque customer will now go down by £41, from £1,306 to £1,265 a year. However, it still leaves them facing bills £74 or 6% higher than at the beginning of 2013.

British Gas has also said that it will apply an additional £12 customer rebate for the Government’s Warm Home Discount scheme – this will appear as a credit to customers’ accounts in the last three months of  2014.

However, other suppliers’ customers are not so fortunate. SSE hiked its prices on 15 November but has said that it will not move to cut them again until Spring 2014. Npower and ScottishPower both increased prices in December but are yet to confirm when they will be passing on levy reductions to their customers.

EDF Energy and E.ON are due to implement their price hikes in January and have already factored in the changes to Government levies. Once the remaining suppliers cut their prices, the average household energy bill is likely to be £1,265 a year. 

Tom Lyon, energy expert at comparison site uSwitch says: “British Gas’ reduction is a New Year tonic for cash-strapped consumers struggling to afford to keep warm. It’s only a part-reversal of the hefty hike it made in November, but it’s a step in the right direction and at least customers will enjoy the benefit on their winter energy bills.

“With Christmas out of the way and consumers facing some financially hard months ahead, the onus must now be on the remaining suppliers to play their part too. They must do the right thing by passing the cuts on to their customers now so that they can feel the benefit throughout winter. Suppliers that are unable to provide this much-needed relief within the next few weeks should backdate it so that their customers don’t lose out.

“However, consumers also need to understand that even with this reduction, their bills will still be higher. This is why they must continue to fight their own corner by ensuring that they are paying the lowest possible price for their energy. The Government reduction is welcome, but it’s small change compared to the price cut you could get by switching to one of the cheapest tariffs on the market.”

Average household energy bills (Source: uSwitch.com)

Supplier Pre-hike bill  Post-hike bill     Hike effective   Bill after levy reduction   Cut effective
British Gas £1,191   £1,306     23/11/2013   £1,265   01/01/2014
EDF Energy £1,190   £1,237     03/01/2014   £1,237   N/A
E.ON £1,226   £1,240     18/01/2014   £1,240   N/A
npower £1,220   £1,332     01/12/2013   £1,294*   TBC 2014
ScottishPower £1,230   £1,325     06/12/2013   £1,287*   TBC 2014
SSE £1,211   £1,304     15/11/2013   £1,266*   March 2014
Average £1,212   £1,291   £1,265

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