Power bill lottery
Why pensioners in Devon face larger price hikes than families in Bristol
PeoPLe all over Britain are being hit by an energy price hike lottery.
Last week, sse became the fifth power giant to raise gas and electricity tariffs, putting them up by 6.9 pc from April 28.
It follows eDF energy, eon, npower and scottish Power, with increases of 9.8 pc, 8.8 pc, 7.8 pc and 1.2 pc respectively. British Gas has pledged to freeze prices until August.
However, for many the price rises are even worse than suppliers let on, because those announced are only averages.
some homeowners will see bills soar by up to 14.4 pc, while others will pay just 0.4 pc more.
This is because prices — and, therefore, price rises — vary wildly depending on where someone lives, how much energy they use and even how they pay their bill. There is no single winner or loser.
In some regions, pensioners win, in others larger families come out on top.
A retired couple in a flat in west sussex with npower, for example, could expect to pay 13 pc more, while a family in a three-bedroom home in Yorkshire could pay an extra 8 pc.
By contrast, a big family in sheffield with scottish Power faces a 9 pc rise of £127, while a single flat- dweller in Plymouth using the same supplier will see a 7 pc increase of £55.
Prime minister Theresa may has promised a crackdown on rip- off energy bills. But the price cap she settles on is unlikely to stop the energy giants hitting some customers harder than others.
Here we explain why there are such big differences — and how you can prevent
yourself from losing out.
HOW ELDERLY CAN END UP WORSE OFF
Homeowners can pick any power supplier they like — so nextdoor neighbours can see an annual £150 difference in their bills.
And that’s even before quirks in the way firms apply price rises.
with npower, for example, single people living in flats or small houses who use less energy face bigger rises than families in larger homes.
This is because the standing charge — a daily fee to cover billing and administration — is increasing.
This makes up a larger proportion of a lower user’s bill, so the rise makes their bill jump more.
This will hit pensioners who may have downsized or live alone after being widowed.
so while npower plans to raise prices by an average 9.8 pc for dual fuel, people using less energy face a 13 pc rise, comparison site uswitch found.
However, there are smaller rises of 10 pc for medium consumers, typically that of a family in a threebedroom house, and 8 pc for higher energy users, such as a family in a four-bedroom home.
‘In our recent price rise we made adjustments to our standard charge to bring it in line with other suppliers,’ says npower.
WHEN LOCATION CAN COST YOU MORE
PrIce increases vary hugely depending on where you live. This is partly because the cost varies of sending energy to different areas.
But it is also a legacy from when 14 regional electricity firms were privatised. Previously they had a monopoly on sales in one area, then enticed new customers from elsewhere with cheap deals.
These geographical price differences still exist. eDF energy, for example, is raising its dual fuel standard tariff by 1.2 pc. But it will more than double in some areas, yet be half of this in others.
A family in a four-bedroom house in Bristol will pay 2.16 pc more, an average of £33. A family in a similar home in cardiff, 40 miles away, will pay just 0.4 pc more, or £6.
eDF energy says customers will be given details of the cheapest tariff available to them when they are informed of the price rises.
A norwich family with sse faces a typical 9.7 pc rise, or £140, compared to 5.4 pc (£81) for a London family.
sse says it has previously argued for a single national charge.
HIT FOR PAYING BY DIRECT DEBIT
cusTomers who pay monthly by direct debit often save up to £100 more a year compared to those who pay every three months. But many who pay by direct debit face a bigger price rise than those who pay on receipt of their bill. eDF energy, npower, sse and scottish Power are all increasing bills by a greater percentage for direct debit customers — though it costs less to process these. scottish Power is upping prices by 8 pc for its direct debit customers and 7.4 pc for those paying quarterly. eDF is raising direct debit costs by 1.2 pc and 1.05 pc for its quarterly payees. npower prices will rise by 10.2 pc for direct debit, 9.3 pc for quarterly bills. only eon is charging more for quarterly. At scottish Power, customers pay the same rise in cash terms, but percentages may vary.
HOW TO CUT YOUR ENERGY BILLS
recenT price rises only affect standard variable deals — usually a firm’s most expensive tariff. so the best way to save is to switch to a fixed deal. see money mail’s best buy tables on page 53.
Also, try thisismoney.co.uk/energy or call the energy Helpline on 0800 977 4498. GoCompare.com and
Uswitch.com have comparison tools.