Gas and electricity Updated:
Npower has become the fourth major energy supplier to cut its gas prices this winter, with its 5.2% reduction due to come into effect on 28 March. This equates to an average annual saving of £32 and could benefit some 1.2m customers, and follows in the footsteps of E.ON, Scottish Power and SSE who have all cut prices to a similar extent in recent weeks.
However, despite the reduction, Npower has come under similar criticism to its peers, namely due to the timing and specifics of the price cut. The 5.2% reduction isn't due to come into place until the end of March, which means households will have to pay current prices during the coldest months, and won't benefit from the reduction until the end of winter.
There's some respite with the fact that the reduction applies to one of its fixed rate tariffs (its Feel Good Fix deal) as well as its standard offerings, but it'll come as little consolation to those on its other dual fuel deals. There's also clear criticism in terms of the level of reduction offered, with many wondering why price falls haven't matched the drop in wholesale costs – wholesale gas prices have fallen by around 50% in recent years, says energyhelpline.com, so there's confusion as to why suppliers can't pass on better savings to customers.
As with the other suppliers, Npower is blaming it on the fact that there are other costs to bear in mind as well as wholesale costs, with their statement reading: "Our prices are coming down in line with our overall costs. 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. In addition there have been increases to other costs, such as network, distribution and smart metering costs."
Npower has pledged to "keep reviewing wholesale costs to see if we can lower our prices any more", but it's unlikely that there'll be any truly significant cuts made in the foreseeable future. So why not take your energy bills into your own hands?
As Mark Todd, director of energyhelpline.com, says: "Suppliers could be doing much more for their loyal customers; they appear to not even be passing on half of the savings they are getting. If you want a reasonable price and a warm home, you must take a few minutes to switch."
So don't hang around! You could always put up with the £32 saving by waiting for Npower's latest price cut to take hold, or you could potentially save over 10 times that by switching to a low cost fixed rate deal – figures from enerygyhelpline.com show that it's possible to save up to £539 by switching, so start comparing the options and see how much lower you energy bills could be.
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