Npower becomes third big six supplier to raise SVT

Npower has become the third big six supplier this week to raise its default tariff in line with Ofgem’s revised price cap.

The supplier will increase the tariff by £117 to £1,254 for the average dual fuel customer, following Eon and EDF which raised their prices on Monday and Tuesday respectively.

A spokesperson for the supplier said: “Ofgem has increased the level of the standard variable tariff (SVT) price cap by £117 in response to increased costs being faced by the industry.

“Therefore Npower will be mirroring the full level of the increase in our own SVT rate from 1 April.”

Responding to the announcement Sally Jaques, head of energy at auto-switching service Weflip, said: “Last week’s energy price cap announcement seems to have sounded the starting pistol for suppliers to introduce price rises.

“Today’s 10.27 per cent (£116.76) hike from Npower means that three of the UK’s biggest energy suppliers have, in as many days, announced significant increases to the cost of their SVTs.

“We’d be amazed if other suppliers – large and small – didn’t follow suit, and we expect to see SVT or ‘default’ rates rise across the board.”

Meanwhile Stephen Murray, energy expert at MoneySuperMarket, said: “Barely is the ink dry on Ofgem’s announcement of a whopping £117 increase on the price cap level than half of the big six (Npower, EDF and Eon) have moved their standard/default prices up to that figure.

“The others seem sure to follow, meaning that 11 million households have higher bills waiting for them come 1 April when the new cap level becomes effective.”

Alex Neill, Which? managing director of home services, added:“People who thought that the price cap would protect them from rising bills will be bitterly disappointed by these hikes.”

Npower recently announced around 900 jobs are due to be cut due to the “extremely tough UK retail energy market conditions”.

The big six supplier, which has a workforce of 6,300, says it is introducing a programme to reduce its operating costs, largely due to the price cap and intense competition on fixed price tariffs.

The company says the actual number of redundancies “will be considerably lower” as around 900 people leave the company annually.

Ofgem announced last Thursday (7 February) that the price cap on default tariffs would rise by £117 to £1,254 per year. The new level will come into effect on 1 April and will be reviewed again later in 2019.

The regulator said rising wholesale costs were responsible for the majority of the increase (£74). It said the allowance for wholesale costs now makes up more than a third (£521) of the overall cap.