Energy company SSE to cut gas prices by 5.3%

British utility SSE (SSE.L) said on Thursday it had lost 300,000 customers over the first nine months of its financial year but it maintained its dividend and earnings per share targets for the full year.

The energy sector has been under mounting pressure to lower prices because of the high costs for households.

SSE came in for heavy criticism past year when it announced a similarly-delayed price cut.

The company said the 5.3% cut in its standard tariff would not take effect until 29 March but that would be three months before its current price freeze ends.

While the price cuts are welcome news, the small size of them – as well as the delayed implementation of them – has not gone amiss.

Dermot Nolan, chief executive of energy watchdog Ofgem, said: “This is a move in the right direction, but, if the market is as competitive as suppliers claim, we would expect to see further price cuts”.

On 20 January, SSE’s rival E.on announced a 5.1% price cut effective from 1 February.

However, Martin Lewis, founder of MoneySavingExpert, branded the reduction as “trivial”.

SSE is to cut its household gas price by 5.3% from March, becoming the second of the UK’s big six energy suppliers to change its tariff following the collapse in commodity prices.

SSE’s price drop, which is the company’s third in two years, is due to save the average household £32 a year.

Will Morris, group managing director of retail at SSE, said: “When we announced our price freeze, we promised that we would not increase prices but would cut them if we could – and that’s exactly what we’ve done”.

But you can save hundreds more by switching, as we explain below.

SSE’s move will save customers just a quarter of this amount at £32.

“While this may look like a price war, these small cuts are to horrendously over priced standard tariffs – it’s a phoney war and these tariffs are best avoided”. The answer – not wait around for suppliers to pass on paltry price cuts.

“Rather than waiting for meagre price cuts, big six standard plan customers should switch to cheaper fixed deals, saving more than £320 a year”.