British Gas and EDF have become the last of the big six energy firms to announce a price drop this year, cutting the price of gas next month by 5.1% and 5% respectively. But even after the cuts their standard tariffs will cost £100s more than the market's cheapest, so check now to see if you can switch and save.
British Gas says its price cut, which comes into effect on 16 March, will benefit 6.8 million of its 11 million customers, while EDF says 900,000 of its 6 million customers will save when its cut comes into effect on 24 March.
However, even after the cuts both firms' standard tariffs will cost £100s more than the market's cheapest, so use our free Cheap Energy Club to check now to see if you can switch and save.
Which tariffs are being cut?
British Gas says it's cutting the price of gas for those on its standard tariffs and most of its fixed tariffs, including Fix and Fall. Prepay customers will also benefit from the cut.
The average price of British Gas's standard dual fuel tariff for a typical user will drop from £1,075/yr to £1,044/yr.
EDF's cut will benefit those on standard tariffs – both metered users and those on prepay – but not those on its fixed tariffs. The average price of EDF's standard dual fuel tariff for typical users will fall from £1,100/yr to £1,070/yr.
Similar price cuts across the big six
Today's announcements mean all the big six energy firms have now cut the price of gas by a similar amount:
- E.on cut its gas prices by 5.1% on 1 February.
- SSE is to cut gas prices by 5.3% from 29 March.
- Scottish Power is to cut gas prices by 5.4% from 15 March.
- Npower is to cut gas prices by 5.2% from 28 March.
But British Gas says it is the only major supplier to cut gas prices three times since the start of 2015, giving an overall reduction of 14%. It cut prices in February and August 2015.
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'False sense of security'
Martin Lewis, founder of MoneySavingExpert and the Cheap Energy Club, says: "In many ways, these price cuts are a nightmare for consumers. They give people the false sense of security that they’re getting a reasonable deal, yet these amounts are paltry and trivial – a reduction of around £30 on the typical bill, nothing close to the drop in wholesale prices.
"More importantly every single person who is on a big six standard tariff, even after the cuts, is being ripped off – paying at least £300/yr more than they need to on typical use.
"In fact many of these companies offer far cheaper rates to switchers. Big six customers with typical usage on standard tariffs will still be paying at least £1,050 a year after the cuts. Yet the market’s cheapest tariffs for switchers are under £770/year on the same usage, and our collective switch which launched last week undercuts that.
"It is also worth looking at the fact that all of the firms have cut prices by similar amounts – it’s as if the first mover sets a discount and the rest take it as a signal that they can get away with doing that little and still be protected because the rest of the herd isn’t doing any better."
What British Gas and EDF say
British Gas chief executive Mark Hodges says: "British Gas was the only major supplier to cut prices twice last year, ensuring customers' bills were lower through the winter. Today we’re announcing a further reduction to ensure our prices remain market-leading.
"Taken together, our three price reductions will bring the average household's annual energy bill down by almost £100. British Gas will be cheaper than 95% of the market, for a typical household on a standard dual fuel tariff."
Beatrice Bigois, managing director of customers at EDF Energy, says: “We are pleased that we can reduce customers’ gas bills for the second time in just over a year.
"Our prices are under constant review and today’s announcement reflects falls in wholesale gas costs. There are other costs impacting customers' energy bills that are beyond our control – these increased steadily during 2015."