Energy cuts should have been faster and further
03/02/2015
The recent cuts that the “Big Six” energy companies made to customers bills could have been much bigger and have been made a lot earlier, according to consumer body Which?.
Research carried out by Which? showed that energy companies have been keeping prices artificially high, and bills could have been cut "further and sooner" than the reductions announced in January. UK households on standard energy tariffs are now £145 worse off than last year, analysis has shown.
Which? has claimed the results of the research shows that households are at a disadvantage due to lack of competition in the energy industry. The “Big Six” energy suppliers, SSE, Scottish Power, Centrica, RWE Npower, E.On and EDF Energy, together account for about 95% of the UK's energy supply market. The lack of smaller companies offering lower tariffs does not add sufficient competitive pressure of the major suppliers to cut bills faster and further, even when wholesale energy prices fall.
Which? executive director Richard Lloyd said:
"Our analysis places a massive question mark over how suppliers have been setting prices over the last two years.
"They now need to explain to their customers why bills don't fall further in response to dropping wholesale prices."
Which? has worked out that due to the fall in wholesale prices, the cuts the “Big Six” energy companies made of up to 5.1%, should actually have been up to 10.3%.
Industry body Energy UK said firms cut prices as soon as they were able to, due to the wholesale purchase of energy.
Energy UK chief executive Lawrence Slade said:
"As prices are falling, as companies can actually afford to pass those savings on, they are doing so.
“You can't suddenly pass the savings in one chunk, it's only as your buying strategy unwinds and as you can take advantage of those new lower wholesale prices that you can pass these on to your customers"
Need Advice?
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
When will we ever learn about overspending?
Even though there have been sporadic signs of recovery in the UK economy there is no doubt that the recession will leave a scar on the lives of many inhabitants of the UK. The fact that so many people have overspent and over-borrowed in the good times has now been exposed in its full glory leaving more and more people literally on the verge of a financial abyss. So will we ever learn about over-sp...
Read MoreUK motorists up in arms about petrol prices
UK motorists are threatening to take action against the ever spiralling cost of petrol in the UK which is now over £1.20 litre. Many areas of the UK are paying upwards of 25p extra per litre than they were just 12 months ago and the situation could get worse before it gets better. The average 50L tank now costs more than £12 extra to fill up than just 12 months ago at a time when many families i...
Read MoreIs the UK rail network next to be nationalised?
There are serious concerns in the UK rail transport sector that the government's insistence regarding the pricing formula for franchises around the country will see many operators pushed towards the financial abyss. As we covered in one of our recent posts, the formula is linked to inflation and if inflation turns negative then we will see train operators forced to reduce their prices at a time wh...
Read MoreCan you save money with public transport?
A survey by the RAC has found that over one third of UK drivers are actively considering downsizing their cars in order to save money. While this is not surprising it will be a shock to the motor trade which has probably had its worst six months for many decades. If drivers are still considering downsizing after the fall in car sales of late is this an opportunity for the pubic transport network...
Read MoreBrits baffled by bills
Britons seem to be baffled by their phone bills, according to the results of a recent survey.Research conducted by the Post Office found that the average household incorrectly estimates what their mobile and landline phone bill will be to the tune of around £79.Financial expert Jasmine Birtles of moneymagpie.com said: "We don't seem to be thinking about the cost of communicating. I hear endless...
Read More