Energy giant warns of price rise

Energy giant SSE has warned that prices will continue to rise - even after profits from UK households jumped by a third following the cold winter.

The latest windfall was described as a "slap in the face" for customers after the company was last month hit with a record fine for mis-selling and in October raised its tariffs by an inflation-busting 9%.%VIRTUAL-SkimlinksPromo%
Full-year results showed that profits from SSE's retail division, which supplies energy to UK households, were up to £410.1 million in the 12 months to March, from £321.6 million the year before.

They revealed that earnings just from energy supply were up by an even-greater 34% from £271.7 million to £364.2 million when falls in areas such as boiler installation and meter supply were stripped out.

Overall 2012/13 pre-tax profits at SSE, which trades as Southern Electric, Swalec and Scottish Hydro, were up 6% from £1.34 billion to £1.41 billion.

It said it took more money from UK households because the weather was colder in 11 of the 12 months of the year than it was the year before. Gas consumption was up 21% while electricity rose 5%. Customer numbers fell 80,000 to 9.47 million.

SSE said it was disappointed that it had to hike tariffs in October, blaming costs including wholesale energy price rises. But it warned that more were in the pipeline because it was facing additional costs of more than £80 per dual fuel customer in 2013/14.

"Unless there is a sustained reduction in prices in wholesale gas and electricity markets, it is highly likely that these additional costs will eventually have to be reflected in higher prices for household customers," it said.

The company added that it intended to "resist this trend of higher costs for as long as possible to shield customers from the unwelcome impact of higher prices".

Richard Lloyd, executive director of consumer group Which?, said said more needed to be done by regulators to keep prices down, encourage easier switching between suppliers and to make bills clearer. He said: "Such a large profit announcement will be a slap in the face for SSE's customers who have been hit with an inflation-busting price rise and seen this company given a record-breaking fine for mis-selling."

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Energy giant warns of price rise

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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