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Big Six all confirm price reductions, but complaints skyrocket

New Year price reductions announced by all of the Big Six energy companies would not be enough to ease the burden of unaffordable energy bills for many consumers, according to the business electric supplier comparison service Energy Advice Line.

On January 8 RWE npower became the last of the major suppliers to announce plans to pass on savings to consumers following government reforms to the environmental levy system. This followed a flurry of announcements by other big suppliers that will see dual fuel customers typically saving £50 a year on their energy bills. Julian Morgan, managing director of the UK’s leading price comparison, switching and advice service for energy consumers, said the reductions were welcome but too small to make a meaningful difference to the most vulnerable.

“Consumers know their energy bills have been skyrocketing, particularly at the end of 2013, when tariffs jumped by double-digit amounts in some cases,” Mr Morgan said. “This New Year round of price reductions, although better than nothing, will be of small consequence to the worst off. Suppliers are simply passing on a financial benefit that won’t cost them a penny. More importantly, the reductions have nothing to do with fundamental problems at the core of the UK’s energy market being. These problems aren’t fixed, nor are suppliers suddenly putting consumers at the centre of their pricing policies. These are still issues that the government and OFGEM need to urgently address.”

Mr Morgan said the reductions were unlikely to improve the battered image of suppliers in the eyes of consumers, who were making complaints against them in record numbers.

Figures released by the Ombudsman Services last week revealed that the number of complaints from consumers battling their energy suppliers skyrocketed at the end of 2013 following price hikes.

Consumers lodged 3,600 complaints in October and November – up from 2,100 over the same period the previous year. Gripes ranged from providers issuing gigantic bills after failing to take payment, through to confusion over complex tariffs. The service said the figure would have been even greater if more people knew how to complain.

Mr Morgan said it remained to be seen whether changes that limit the number of tariffs and require suppliers to simplify their prices would reduce the level of complaints. The changes had to be introduced by suppliers by January 1 although many suppliers overhauled their pricing system ahead of schedule. “This record level of complaints really does underscore the fact that consumers are really struggling,” Mr Morgan said.

“They not only find the bills confusing but really are struggling to pay. It will be very interesting to see whether the level of complaints falls once the new pricing system has bedded in; I’m doubtful. As we have said before, these reforms are welcome but they don’t address the fundamental problems in the UK’s energy market, namely, there’s not enough competition and consumers still find it very difficult to identify the cheapest deals in such a complex system.”

Mr Morgan urged consumers to seek help from reputable and independent price comparison and switching services to navigate complex tariffs and resolve problems with suppliers. “Many consumers don’t realise that services like ours are free. We not only help domestic and business energy users find the cheapest deals but, sadly, we have lots of experience helping consumers sort out their problems with suppliers.”

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