Gas and electricity Updated:
Scottish Power has become the third of the Big Six to announce a price cut in the past week, following the dramatic reduction in the wholesale cost of gas in recent months. The supplier is reducing its standard gas prices by an average of 4.8%, resulting in a typical saving of £33 per year, with around 1.1 million customers set to benefit.
The price cut will come into force on 20 February, and will only apply to customers on standard tariffs. However, the supplier also announced the launch of a new fixed price tariff, touted as being one of the most competitive on the market, which could see the average dual fuel bill cost just £930 per year.
The move follows similar reductions from E.ON and British Gas, who cut prices by 3.5% and 5% respectively. However, it's also faced similar criticism, namely that none of the suppliers have passed on the significant savings they've witnessed themselves – the cost of wholesale gas has fallen by around 20% in the last 12 months, making these price cuts seem small by comparison.
There's also criticism that Scottish Power's price cut, much like British Gas's, will only come into force at the end of February, meaning customers will still be paying high prices during the season of peak energy usage.
That's why customers are being urged to be proactive and compare the options themselves. Figures from energyhelpline.com show that the typical dual fuel customer could save as much as £405 by switching, particularly if they're on standard tariffs and make the move to a fixed rate, far more than if you simply accepted your current supplier's price cut.
The pressure's now on the remaining suppliers to make their own price cuts, but when you could save so much more cash by switching yourself, why wait?
Mark Todd, director of energyhelpline, commented: "For customers the best thing to do is switch. The cheapest UK energy tariff costs £918, over £200 less than the cheapest standard price. Being on a standard energy deal really does not pay even after these cuts; the smart money is on switching."
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