SLAP IN THE FACE FOR FAMILIES... ENERGY BILLS TO SOAR BY 12.5%
BRITISH Gas yesterday delivered “the ultimate slap in the face for families” by announcing a 12.5 per cent hike in electricity tariffs for 3.1 million customers – despite falling energy costs.
While gas prices will remain unchanged, there was fury after it was revealed that the average annual “dualfuel” bill for a typical household on a standard tariff will now rise by £76 to more than £1,100.
The energy giant stressed that the price rise, which will take effect on September 15, is its first since November 2013. And it pledged to help to protect more than 200,000 vulnerable customers from the increase.
But critics and rivals quickly rounded on the company, warning it would now see a mass “exodus” of its customers.
Rip-off
Mark Todd, founder of the comparison site energyhelpline, said: “British Gas’s price freeze has melted in the summer sunshine. To beat the price rise you have to switch.
“But don’t be fearful, it’s quick and easy to do this and can save a British Gas standard customer around £250.
“This latest price rise from British Gas should add to the exodus.”
Will Hodson, co-founder of tariff-switching company The Big Deal said: “British Gas announcing a price rise as they make half a billion in profit is the ultimate slap in the face for families.
“Their standard tariff now costs £286 a year more than the cheapest deal on the market.”
And Hayden Wood, co-founder of renewable gas and electricity supplier Bulb, said: “I simply can’t understand why British Gas are increasing prices for their customers when the cost of energy is going down. New energy provider Bulb has passed on two price reductions already this year. ”
Furious customers took to social media to attack British Gas.
One wrote on Twitter: “British Gas are the biggest rip-off out there, ditch and switch like I did a long time ago.”
Another said: “This is while fuel prices worldwide continue to FALL ! If you are on RIP-OFF British Gas SWITCH – it’s fast, free and you will save £hundreds.”
Details of the price increase came as British Gas owner Centrica posted half-year results.
They revealed that earnings from its consumer business had plunged by more than a quarter after it lost 377,000 UK customer accounts.
Underlying operating profits from its UK home energy supply arm tumbled by 26 per cent to £381million as the group said it was also hit by warmer than normal temperatures and the “pre-payment tariff cap”.
Overall underlying operating profits were four per cent lower at £816million for the six months to June 30.
The group said it held off from the price rise for “up to six months longer than some of our competitors”.
But the hike will mean an average dual-fuel bill for a typical annual household tariff will rise by £76 to £1,120.
The group said it will give more than 200,000 customers receiving a warm home discount a £76 credit to offset the tariff increase.
British Gas is the last of the Big Six providers – alongside EDF, npower, ScottishPower, SSE and e.on – to increase prices after it promised in December last year to freeze tariffs until August.
Pressures
The rise comes despite falling wholesale energy costs, though the group insisted its overall electricity costs had increased by 16 per cent since 2014.
Defending the rises, Iain Conn, chief executive of Centrica, said that while he admitted the commodity price of electricity had come down, the company was facing “significant cost pressure” on transmission and distribution, as well as costs associated with Government policy changes.
A spokeswoman for the Department for Business, Energy and Industrial Strategy said: “Energy firms should treat all their customers fairly and we’re concerned this price rise will hit many people already on poor-value tariffs.
“Ofgem has committed to taking prompt action, in consultation with consumer experts, to develop proposals including a safeguard tariff.”
SHOCK news that British Gas will hike electricity charges next month is part of a wider assault on the nation’s hard-pressed wallets.
Britons are under sustained attack from the taxman, banks, insurers and holiday companies as rip-off Britain returns with a vengeance. But the good news is that with a little planning you could save yourself hundreds or even thousands a year.
COMPARE AND SWITCH
The 12.5 per cent British Gas charge hike is almost five times consumer price inflation at 2.6 per cent and will cost millions of customers £76 a year each on average.
Peter Earl, head of energy at CompareTheMarket.com, said: “Savvy customers willing to take action can save over £290 simply by switching provider.”
Switching to a comparison site is quick with no disruption in service and no engineers coming to call.
Motor insurers are also profiteering as ordinary car owners are now paying the highest premiums ever.
Campaigning law firm Thompsons Solicitors said insurance premiums have hit a record high after rising 19.6 per cent in a year, even as insurers post record profits.
Head of policy Tom Jones said: “The industry is unabashedly profiteering at the consumer’s expense.”
Again, you could save hundreds of pounds on a price comparison site.
TAX BURDEN GROWS
Inheritance tax (IHT) is the most hated tax in Britain and the burden is growing, but here too you can fight back.
HM Revenue & Customs took a record-breaking £4.9billion in 2016/17 while the IHT take is up another 22 per cent so far this year.
Danny Cox, chartered financial planner at Hargreaves Lansdown, said IHT receipts are set to smash records: “The Exchequer’s coffers continue to benefit from the booming housing market and rising asset values, despite the new tax break for the family home.”
IHT is highly punitive, with the 23,250 estates caught by the tax in 2014/15 facing an average bill of £164,000.
Cox said families can cut any liability through careful planning and gifting, but may need to take financial advice.
Rising house prices have also pushed up the Treasury’s stamp duty take, which rose 17 per cent in 2016 to £8.3billion, up from £7.1billion in 2015.
RED LINES
City regulator the Financial Conduct Authority (FCA) has condemned pricey bank overdraft charges because they do not reflect the low level of risk involved.
The FCA is preparing action, but Andrew Hagger, personal finance expert at Moneycomms, said worried customers should check what their bank charges: “If you risk dipping into the red get any overdraft authorised beforehand as unauthorised overdrafts cost even more.”
HOLIDAY HELL
You cannot escape rip-off Britain by jetting off overseas as holidaymakers are stung by a string of charges.
“If you leave items such as airport parking, travel money and car hire until the last minute you can pay hundreds of pounds more than if you had shopped around,” says Emma Grimster, spokesperson at TravelSupermarket.com.
There is no escape when you arrive, with holidaymakers being duped out of nearly £500million when using debit and credit cards overseas.
Consumers are often asked whether they would like to pay in pounds rather than local currency but this exposes consumers to poor exchange rates and extortionate extra fees, according to FairFX.
Chief executive Ian StraffordTaylor said: “Always pay in local currency, never in pounds.”