Energy firm hikes prices again in time for winter
ANOTHER ‘Big Six’ energy firm is pushing through a second price rise in a ‘bills tsunami’ that will add more than £100 a year to the cost of heat and light.
ScottishPower has joined British Gas, EDF and E.On in announcing a second round of price rises for customers who are signed up to what are already expensive standard tariffs.
Industry experts believe the remaining members of the Big Six – SSE and Npower – are likely to follow suit before the winter.
ScottishPower increased its standard variable tariff (SVT) for gas and electricity by 5.5 per cent in June, adding £63 a year to a typical bill. Now prices are to rise by another 3.7 per cent – an average of £46 – from October. This will take the typical dual fuel bill for the company’s 900,000 SVT customers up to £1,257 a year, making it the most expensive of all the major suppliers.
The industry has blamed rising wholesale energy prices and the impact of various levies, such as subsidies to fund a switch to green energy and the cost of installing smart meters, for the increases.
The net effect of the repeated price rises from both large and small suppliers means the Government’s plan for a price cap on expensive SVT deals is likely to offer little help.
The estimated ten million households on an SVT are likely to be paying more for energy next winter than they were last year, despite the promised cap which will come into effect later this year.
Consumer experts say families and pensioners worried about their bills should not bother to wait for the cap.
Instead, they should urgently switch to one of the cheaper fixed-rate deals on the market, which could bring savings of more than £400 a year.
Managing director of home products and services at Which?, Alex Neill, said: ‘A second price rise within a few months makes this the most expensive Big Six standard variable tariff and will leave almost a million ScottishPower customers reeling.
‘They will have seen their bills hiked by an average of £109 in just over four months.
‘Before the energy price cap comes into effect later this year, customers still stuck on poor value standard tariffs should look to switch now as they could potentially save more than £400 a year.’
Chief executive at Citizens Advice, Gillian Guy, said: ‘Yet another price hike is the last thing that hard-pressed ScottishPower customers need.
‘Vulnerable people in particular will be hit by this price rise. We know those least likely to switch, and therefore on an SVT, include the elderly,
‘Consumers can hardly keep up’
those on low incomes and people with disabilities.’
Spokesman for price comparison firm Energy Helpline, Victoria Arrington, said: ‘Consumers can hardly keep up with the tsunami of price hikes this year.
‘This second ScottishPower price rise is yet another bitter pill to swallow for millions of households. With a major supplier putting up prices again, one has to question the impact on consumers.’
Energy expert at uSwitch. com, Emma Bush, said: ‘It’s vital that consumers don’t mistakenly think a Government price cap will protect them.
‘Instead of being sitting ducks on standard variable tariffs, they can show their supplier who’s boss by switching away and saving up to £482.’
ScottishPower said the majority of its customers, who are on fixed-rate tariffs, will not be hit by the latest rise.
Neil Clitheroe, chief executive for retail at the company, which is owned by Spanish business Iberdrola, said: ‘We have seen significant increases in wholesale energy costs since April and, like others in the industry, this means we need to increase our prices.
‘More than two-thirds of our customers are on fixed-price products or other tariffs not impacted by this price change.
‘Those customers affected by the price change will be contacted and offered the opportunity to move to a fixed-price tariff alternative and avoid this increase.’