Bitter blow as SSE announces 8.2% price hike

• SSE is to put its prices up by 8.2% or £111 for gas and electricity with effect from 15th November

• SSE blames increasing cost of buying wholesale energy, paying to deliver it to customers’ homes and Government-imposed levies collected through energy bills

• Average household bill for a dual fuel SSE customer will now go up from £1,354 to £1,465 a year – however it has pledged not to raise prices again before  Autumn 2014 at the earliest

• SSE last hiked its gas and electricity prices last winter (October 2012) by 9.6% or £119 – this will be its 4th price rise since December 2010

• In May, SSE reported a 27.5% increase in year-on-year profits – retail operating profits were up from £321.6 million to £410.1 million in 2012/13 but it expects to make a loss on its retail arm in the first half of this financial year.

SSE has today announced that it is putting its prices up by 8.2% or £111 for gas and electricity. The increase comes into effect on the 15th November. It will add an extra £111 to SSE’s average standard dual fuel bill, which will increase from £1,354 to £1,465 as a result. However, it has also pledged not to increase its prices again before Autumn 2014 at the earliest.

The move is a blow to consumers as it brings to an end a price freeze following last October’s price hike – SSE had committed to holding its prices until at least the second half of 2013. Although, it recently suggested that it will make a loss on its retail arm in the first half of this financial year, in May, the supplier reported a 27.5% increase in year-on-year profits, with retail profits up from £321.6 million to £410.1 million. This led to it facing calls to cut prices to alleviate the pressure on customers.

Today’s news suggests that these calls have fallen on deaf ears. The supplier has blamed increasing cost of buying wholesale energy, paying to deliver it to customers’ homes and Government-imposed levies collected through energy bills but the move also paves the way for other suppliers to increase their prices too – none of the other big six suppliers have committed to a price freeze.

Today’s announcement will pile further pressure onto consumers. SSE has now increased its prices four times since December 2010 taking its average dual fuel bill from £1,038 a year to £1,465 following today’s announcement – a 41% or £427 increase in less than three years.

Ann Robinson, Director of Consumer Policy at Uswitch.com, says: “This is a crippling blow for consumers, who are still reeling from last winter’s price hike. Adding a further £111 to an already sky-high energy bill will leave consumers buckling under the pressure. It’s the final nail in the coffin for affordable energy

“Of course the danger now is that the other big six suppliers will follow suit. This raises the spectre of yet more households forced to cut back on their heating. Last winter almost seven in ten households (69%) went without heating at some point to keep their energy costs down, while over a third (35%) said that cutting back on energy usage was affecting their quality of life or health. This is the grim reality we face as the cost of energy spirals ever higher.

“I strongly urge consumers not to take this on the chin, but to fight back. You don’t have to watch your energy costs soar. Firstly, reduce the amount of energy you use by making your home more energy efficient, perhaps by taking advantage of the Green Deal. Secondly, shop around for the best deal so that you pay less for the energy you do use. There is now around £350 difference between the cheapest and most expensive energy tariffs on the market – this is a substantial saving and could make all the difference when it comes to keeping warm.”

Average household energy bills:

|

British Gas

|

£1,340

|

£1,340

| |

EDF Energy

|

£1,332

|

£1,332

| |

E.ON

|

£1,370

|

£1,370

| |

npower

|

£1,352

|

£1,352

| |

ScottishPower

|

£1,368

|

£1,368

| |

SSE

|

£1,354

|

£1,465

| |

Average

|

£1,353

|

£1,371

|

Source: Uswitch.com