Npower to cut energy bills by 2.6%

Three million Npower customers will get some reduction on their bills

The energy supplier Npower has announced an average price reduction of 2.6%, following the government's changes to energy bills.

The price cut will affect all customers whose prices went up in December, including those on fixed, or discounted rates.

As a result, 2.6 million dual-fuel customers will receive an average reduction of £50 on their bills.

A further 500,000 electricity-only customers will get a rebate of £12.

The main price reduction will apply from 28 February, with the electricity rebate in the autumn.

Npower had previously announced the largest price rise of the big six, averaging 10.4%.

It is the last to announce details of price cuts, which followed the government's decision to alter the green levies on bills.

Three rival suppliers, E.On, EDF and Scottish Power have been criticised by consumer groups for not extending the price reductions to those on fixed tariffs.

British Gas, SSE and now Npower have said those on fixed rates will benefit, alongside those on standard variable rates.

SSE has been criticised for waiting until the end of March to cut bills.

Real rises

With all the price reductions now announced, it has become possible to calculate what the real rise in energy bills has been, after the removal of some of the social and environmental levies.

According to price comparison site Uswitch, average dual-fuel bills on standard tariffs have risen, or will rise later in the spring, by an average of 4.3%. That is double the latest CPI inflation rate, of 2.1%.

The Uswitch figures imply that E.On raised its prices by the lowest amount, 1.1%, while Npower had the largest price rise, at 6.5%.

However, there is relatively little variation in cost between the six big suppliers, with just £62 difference a year between the cheapest and the most expensive.