British Gas has announced a 5% reduction in household energy bills, a move expected to spark a new round of price cuts among the Big Six energy suppliers. The average household will save approximately £35 annually, with the new rates taking effect on August 27. This marks the second price cut from British Gas in six months, following a similar reduction in January.
The company attributed the cut to lower costs of generating electricity. Mark Hodges, managing director of British Gas, said: 'British Gas is committed to offering competitively priced products and the price cut we're announcing today demonstrates that.' He added that the reduction reflects lower projected total costs for 2015 and 2016, and that customers will benefit ahead of next winter.
Consumer groups welcomed the news but criticised the delay in implementation. Stephen Murray of MoneySuperMarket said: 'A cut in bills can be brought in immediately, so it's disappointing to see that this isn't the case and British Gas is making its customers wait over a month.' He urged consumers to shop around, noting that cheaper tariffs could save around £200 more than the British Gas cut.
Gillian Guy, chief executive of Citizens Advice, called on other suppliers to follow suit: 'Customers have been losing out on low wholesale energy prices for too long. All energy suppliers need to cut prices to help bring down bills.' The remaining Big Six firms—EDF, E.on, Npower, Scottish Power, and SSE—declined to confirm whether they would match the cut, stating that prices are under constant review.
Martin Lewis of MoneySavingExpert.com expressed scepticism about market competition, suggesting that the announcement highlights how prices were previously kept artificially high. The price cut applies to standard and 'fix & fall' tariffs, with regional variations based on distribution costs.
