Price war hope as British Gas cuts bills

Published:
04 February 2010
Topic:
News,Gas & Electricity

From today, British Gas customers will see a 7% drop in the price of gas, saving 8million homes an average of £56 a year.

The energy giant cut gas prices for all its standard customers, making the average standard dual fuel bill £1146 a year.

Not only that, it's also launched a new tariff - Websaver 6 - which is now the market-leading deal, with an average annual bill of £899.

Although there were a spate of cuts from all the big six providers last year - British Gas, EDF Energy, E.ON, npower, Scottish Power and Scottish & Southern - most of these didn't benefit customers on their standard deals.

Scott Byrom, moneysupermarket.com's head of utilities, said many people will be hoping other energy firms now follow British Gas' lead, particularly after record high winter energy bills.

He explained: "While British Gas is the first and only energy provider to offer a price cut since March 2009 to standard prices, many consumers will be hoping that other providers will follow suit."

 Provider

 Average standard tariff

 Average online/best tariff

 British Gas

 £1,146.47

 £899.00
WebSaver 6

 npower

£1,255.78

 £907.36
Sign Online 17

 OVO Energy

 n/a

£920.68
New Energy

 First Utility

 n/a

 £921.20
iSave v2

 Scottish & Southern

 £1,192.24

 £925.36
Go Direct 3

 Scottish Power

 £1,361.95

 £931.31
Online Energy Saver 8

 E.ON

 £1,194.67

 £939.93
Fix Online V5

 EDF Energy

 £1,189.40

 £944.35
Online Saver V5

Go online

As you can see, all the cheapest energy deals are web-based tariffs and customers can save hundreds of pounds a year by going online.

Scott continued: "Changing from a standard tariff to an online deal could save consumers an average of £300 a year, this is a 25% instant price drop for annual bills.

"This is a more substantial way to reduce your energy costs rather than waiting for the energy companies to make small cuts to their tariffs, especially as they may never come."

You can read more about keeping your bills down in our article 'How to put the freeze on rising energy bills'.

Standard benefits

The great news about this cut in prices is that it's for all standard customers. Usually when an energy firm announces a cheaper new deal, it's only for households who actively move to its cheapest tariff, not those who remain on its standard rate.

With many people sticking with a standard tariff, many homes have seen energy prices rise, despite a number of cuts last year.

However, while this move from British Gas will benefit the majority of its customers, it's still worth taking a few minutes to compare gas and electricity providers and see which firm has the best deal for your home.

The best prices for you depend on where you live and how much energy you use, so don't assume that because a company is hitting the headlines, it will be the cheapest for you.

Fuel poverty

Unfortunately, today's development may not cut bills down to an affordable level for many UK customers.

On top of that, Ofgem has just warned that bills could rise by 25% over the next decade, meaning households in fuel poverty still face an uncertain future and the prospect of being unable to meet the cost of heating their homes.

Scott called on providers to make even more cuts to help these customers, adding: "My advice to bill payers is to continue shopping around for the best deal for your consumption and region.

"If you are languishing on a standard tariff, think about moving immediately to paying monthly by direct debit or to an online deal as these are by far the best products on the market with the lowest prices."

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