British Gas owner boosts profits

gas flameLewis Whyld/PA Wire/Press Association Images

The owner of British Gas has increased profits at its residential arm by 23% in a move fanning flames of anger over recent price hikes.

Centrica said profits at British Gas Residential, which has 15.8 million energy accounts in the UK, lifted to £345 million in the six months to June 30 after volumes were boosted by the cool start to the summer.
But the UK's biggest energy supplier also benefited from higher prices because, while it dropped its standard electricity prices by 5% in January, this did not cancel out a 16% rise in August, when gas bills also went up by 18%.

Consumer Focus has accused utility companies of being quick to pass on rising wholesale costs to consumers but being slow to drop prices when they fall and today's bumper profits haul is likely to provoke further outrage.

Profits at its residential arm are also higher because of weak figures a year ago when it delayed passing on price rises to customers, meaning it was supplying at a loss.

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British Gas owner boosts profits

Figures from charity Age UK show that 29% of those over 60 feel uncertain or negative about their current financial situation - with millions facing poverty and hardship.

Even though saving for retirement is not much fun, the message is therefore that having to rely on dwindling state benefits in retirement is even less so.

To avoid ending up in this situation, adviser Hargreaves Lansdown recommends saving a proportion of your salary equal to half your age at the time of starting a pension.

In other words, if you are 30 when you start a pension, you should put in 15% throughout your working life. If you start at 24, saving 12% of your salary a year should produce a similar return.

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