Three million Npower customers are set to see a reduction in their annual energy bills following an announcement by the firm to cut prices by 2.6%.
Npower’s declaration now means that all of the Big Six have cut prices following the decision to alter the way green levies are processed.
The price cut is a result of government changes to the levels of green tax charged to energy companies and will lessen slightly the effects of the pre-Christmas price hikes.
Factoring in a rise in costs
Npower announced the largest price increase of the Big Six energy providers, with average costs rising by a staggering 10.4%.
However, the new changes will see 2.6 million dual-fuel customers receive an average reduction of £50 on their bills. A further 500,000 electricity-only customers will get a £12 rebate.
The main price cuts will include customers on both fixed and discounted rates and come into force from the end of February, while the electricity reductions will occur in the autumn.
Npower’s announcement now means that all of the Big Six have cut prices following the decision to alter the way green levies are processed.
According to Uswitch, average dual-fuel bills have risen, or will rise, in the Spring by an average of 4.3% – more than double the CPI inflation rate of 2.1%.
The figures suggest that E.On raised its prices by the lowest amount, while Npower had the largest rise, at 6.5%.
Keeping things in check
However, just £62 separates the most expensive and the cheapest deals, showing very little variation between the Big Six suppliers.
Setting up direct debits on prepaid cards to pay utility bills is a great way to manage spending, while it also provides additional security for transactions.
Three of Npower’s rivals, E.On, EDF and Scottish Power have all come in for criticism from consumer groups for not extending the recent price reductions across the board.
Customers of fixed tariffs stand to miss out on any potential savings, while SSE has also been criticised for not introducing its reductions until March.
British Gas reduced prices by 3.2% on 1 January following the downgrading of the Energy Company Obligation in late 2013.
There are also concerns that the watering down of the ECO scheme has delayed the introduction of energy-efficiency improvement measures.
Critics fear that this move will have negative consequences in the long term, as it was seen as a way of pushing energy bills down yet further.