Gas and electricity Updated:
Npower has become the latest of the Big Six to announce that it's cutting prices, with standard gas tariffs set to reduce by an average of 5.1%. The rate cut will come into effect on 16 February and some 1.5 million customers will benefit, resulting in typical savings of around £35 per year.
It can't be denied that it's a welcome move – particularly given that it's being implemented sooner than some other suppliers' cuts – but yet again, the price cut pales in comparison to how much energy companies themselves have saved over the past few months. The industry as a whole is coming under huge pressure to reduce gas prices in line with the significant reduction in wholesale costs, with some estimating that prices have fallen by over 20% in the last year.
Surely, then, the end customer should see the same kind of reduction? Well, apparently not, and Npower has a similar explanation to other suppliers. "We're really pleased that we're able to pass on the benefits of lower wholesale costs to our customers. We've balanced this against higher transportation and distribution costs, and also the cost of delivering Government obligations," it said in a statement.
"We buy our energy well in advance – months, even years ahead. So like other suppliers we're playing catch-up with falls in the wholesale market, and can now pass on these savings." Unfortunately, those savings aren't quite as much as many people would like, and it's also worth pointing out that the price cut only applies to those on standard gas tariffs – which are already far more expensive than fixed rate alternatives.
So, why not take the opportunity to switch? If you're on a standard tariff you could save far more by comparing the options and seeing what else is available – figures from independent comparison site energyhelpline.com show that customers could save as much as £405 by switching, far better than a measly £35.
Fixed tariffs are invariably cheaper than their standard counterparts, and as an added bonus, they'll give you peace of mind that the price won't change during the term. Some tariffs start from just over £900 per year, so use our handy search tool to get the process started and see how much you could save.
Compare the best UK electricity and gas prices
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