npower has become the latest energy company to announce price rises, just days after it was placed joint bottom of a complaints table.
The firm is to increase the cost of its domestic gas and electricity tariffs by 5% from 4 January 2011, although it said that its social tariff – known as the Spreading Warmth tariff – would be fixed until next April.
The hike will affect the majority of npower's 6.6 million residential gas and electricity customers, and is expected to increase the cost of an annual dual fuel bill by £54.
npower said that it is the first rise in two years and that even after this increase, gas prices would still be cheaper than at the end of 2008.
The firm said that a 50% hike in wholesale prices, higher network charges and new environmental obligations were to blame for the increase.
"When wholesale costs are driving prices up, it's a good time to review the way you manage your energy," said Kevin Miles, CEO of npower retail.
He urged customers to pay for their bills by direct debit, contact the firm for energy efficiency advice and to send regular meter readings to ensure they only pay for what they use.
The move means that npower has become the fourth of the 'Big 6' UK energy companies to announce a rise in its residential tariff over the last few weeks.
British Gas, Scottish and Southern Energy and Scottish Power have already implemented increases to their tariffs.
Earlier this week, Consumer Focus launched a new complaints league table to help people decide which energy company to use.
npower found itself sitting joint bottom of the league, having been awarded just two stars out of five, the same score as was given to Scottish Power and EDF.
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