Npower 4th energy firm to cut bills as wholesale prices drop

ENERGY firm npower yesterday became the fourth major UK provider to cut gas prices with a reduction of up to 7 per cent in standard bills.

The move, which will take place on 26 March, will see its two million residential gas customers pay on average 50 less.

It is also overhauling its discounts for those who pay by monthly direct debit, which will see the 12-month anniversary discount available to electricity customers double to 40, equivalent to 4.8 per cent off electricity bills.

Npower's cut comes after British Gas, E.on and Scottish & Southern Energy reduced prices in recent weeks in response to sharply lower wholesale costs.

Yesterday's announcement will reduce tariffs by 6.7 per cent on average for npower's single fuel gas customers who pay quarterly on receipt of their bill.

It added that, by taking into account the additional discounts offered for paying monthly by direct debit, the average npower gas bill reduces by 7.8 per cent.

Dual fuel customers will benefit from a 7.1 per cent cut on average, including the changes to the monthly direct debit discounts.

The group has 100,000 out of two million gas customers on monthly direct debit plans, which allows households to pay a flat rate every month through the year – reviewed every six months to check cost against usage.

Around 350,000 out of its 4.2million electricity customers pay by monthly direct debit.

By regions, the biggest cut for monthly direct debit gas customers is 13 per cent in the East Midlands, with the smallest being a 2 per cent cut in Wales.

For those who pay quarterly on receipt of bills, the price cuts vary from 9 per cent in the East Midlands to 2 per cent in Wales.

Consumer Focus said that, for those who pay by monthly direct debit, npower would be the second cheapest of the "big six" for gas, behind E.on, but it remains the third most expensive electricity provider in the UK.