Consumers ‘still £1.9 billion worse off’ after energy price changes

Consumers are collectively £1.9 billion worse off than they were a year ago as a result of energy price movements, it has been calculated.

The figure was worked out by uSwitch after Scottish Power became the last of the big six suppliers to unveil a reduction this week, announcing it would trim gas prices by five per cent from February 27th.

While this may mean lower costs for consumers of £34 a year or 2.6 per cent on average, it comes after two previous large hikes that put up bills by £224 (21 per cent) in the previous 12 months.

Moreover, the average annual price bill once all the newly-announced cuts are in place will be £1,259 – 91 per cent more than the £660 a year typically charged in 2006.

Such costs could still leave many in debt as they struggle to maintain bills, as uSwitch calculated that the lower prices will only lift 136,500 out of fuel poverty.

Commenting on the situation, director of consumer policy at the site Ann Robinson said the reductions "will seem like a drop in the ocean to cash-strapped consumers, especially when compared with the £224 or 21 per cent price hike seen since the end of 2010."

She added: "The cost of energy has become a major household worry and these single digit price cuts will do little to change that." 

However, the moves by energy firms to cut prices have been praised, with site editor at MoneySupermarket.com Clare Francis calling the round of reductions started by EDF Energy as a "welcome boost" for consumers.

Posted by Paul Thacker