What have we announced and what does it mean for you?

We're cutting our Standard gas prices by an average of 7%* with immediate affect which will benefit around 8 million customers.

We recognise that household budgets are stretched and that you, our customers are concerned about the amount of gas you may have used during the recent cold snap. We're therefore taking the earliest opportunity to pass on lower wholesale prices to you.

By doing this we are now the country's cheapest standard gas & electricity of any major supplier on average, no matter how you choose to pay**.

This is the third time we've cut prices in the past year, cutting a total of £187* from the average dual fuel bill.

*Based on average annual consumption of 20,500 kWh for gas and 3,300 kWh for single rate electricity, are an average across all regions and an average across the Monthly Direct Debit, Pay as You Go and Prompt Quarterly Cash or Cheque methods of payment, rounded and including VAT.

**Based on average annual consumption of 20,500 kWh for gas and 3,300 kWh for single rate electricity. Comparing Standard prices as at 4th February 2010.

Will my direct debit payments go down immediately?

Your payments will automatically be reviewed at your next reassessment to take into account the new prices when we produce your next statement. You will still be notified of any changes to your direct debit in accordance with the Direct Debit Mandate.

Will my direct debit payments go down by the same amount you've dropped your prices?

Not necessarily. Each payment amount depends on a number of factors, including the amount of energy you've used, any debits or credits on your account and the unit cost of energy.

We take all these factors into account when re-assessing each monthly payment plan to make sure you're not paying too much or too little.

How will I know if my direct debit payment changes?

Once we've assessed your payments, we'll let you know of any changes to the amount you need to pay usually on your bill or in writing, at least 14 days in advance. You'll get plenty of advance warning of any new payments.

I've protected my prices. Will my payments change even though my rate is fixed?

Fixing your energy price ensures that the unit rate you pay for your energy won't change during the protected period.

However, if your consumption changes, e.g. you use more units of energy, we may need to increase your direct debit payments to ensure you don't go into debt and therefore face a larger bill in the future.

I pay by Standing Order, should I reduce my payments to take account of the price reduction?

Yes, but not until we ask you to when we take account of our price reduction. We will reassess your payments and let you know what you need to do.

This will be shown on the next statement due after 4th February. We'll notify you in writing of any changes to your payment amount. You'll then need to contact your bank to make these changes.

I pay by Magnetic Card, should I reduce my payments to take account of the price reduction?

No. We will take account of our price reduction when we reassess your payment. This will be shown on the next statement after 4th February. We'll notify you in writing of any changes to your payment amount and when you need to start paying the new amount from.

Are you planning any more price reductions?

We're committed to offering you competitive prices and keeping a close eye on wholesale costs.

We understand that some of our customers are facing tough financial times at the moment but the wholesale market remains volatile. We'll continue to do what we can, when we can.

We have a strong track record of cutting prices. We were the first to reduce prices in 2009. We're again the first to cut prices this year and are doing so while it's still winter.

Last November we launched EnergySmart™, giving you the opportunity to have complete transparency about your consumption and how much it's costing you on monthly rather than quarterly basis.

Check out our EnergySmart™ service, it's free and could save you up to £150 >>

Why aren't you reducing electricity prices too?

We already have on average the cheapest standard electricity averageof any major supplier* following our price reduction in May 2009.

Use our online get a quote tool to find the best tariff for you >>

*Based on average annual consumption of 3,300 kWh for single rate electricity. Comparing Standard tariff prices as at 4th February 2010

I'm on a fixed price product, am I missing out?

We offer fixed price products to customers who like the certainty of knowing what their energy costs are going to be.

Overall, fixed-price customers have benefited from these deals; some have saved as much as £1000 over the course of their contract.

Important facts about Fixed Contract customers

• When prices fall for our standard tariff yours don't - but they don't rise either.
• The wholesale market remains volatile and some of these products run through to 2011 and 2012, providing long-term peace of mind.
• Historically customers on long term contracts have tended to save money over the period of their contract.
• We have around 3 million accounts on fixed price tariffs.
• So in a phrase, many customers have chosen Fixed Price 2011 and Fixed Price 2012 for the peace of mind that comes from knowing their energy prices are protected.

Can I come off of a fixed-price product?

You can leave your fixed-price deal at any time, but you will incur a cancellation fee as provided for in your terms and conditions which reflects the fact that we've already bought the gas and/or electricity for the duration of your contract.

Is the gas prompt pay discount changing?

We're increasing the % prompt pay discount for gas from 4 February across our variable rate tariffs.

The % discount rises from 1.9% to 2.1% but the maximum discount per bill remains the same at £3.75 (inc VAT).

Are there any changes to the gas Direct Debit discount?

We're increasing the maximum discount amount gas DD customers can earn each year.*

From 4 February, the annual cap will rise from £35 (inc VAT) to £65 (inc VAT). The rate at which the discount is earned remains the same at 0.196 p/kWh (inc VAT) off gas Tier 2 consumption charges (or 4.8% off consumption charges for Click Energy 2-5 customers)
*This excludes Click Energy customers, whose Direct Debit discount is reflected within their unit rates, and Fixed or Price Protected tariffs unaffected by the 4^th February reduction.

Wholesale prices fell a lot last year, why are you only cutting by 7%?

Wholesale prices have fallen, but they've risen too. For example, on one day alone during the recent cold snap, wholesale gas prices trebled!

Because we buy energy gradually over a couple of years, it means that wholesale and retail prices don't rise and fall in exact sync, which is why we're able to cut retail prices now, even though there have been recent rises in the wholesale market. Pricing, and what's behind the prices that make up your bill can seem complex.

Use this link and watch the video on the right hand side to see what makes up the average gas and electricity bill.

I'm an Essentials customer, do I benefit from this cut?

Customers on our Essentials tariff will continue to benefit from significantly lower prices than those on our standard prices, with savings amounting to £123 on average per annum for a typical household with gas and electricity with British Gas

Whilst customers on our Essentials tariff will not see a reduction in their prices at this time, they will continue to save, on average, £123 after our standard gas price reduction. It's important to remember that Essentials customers never experienced the record rises that affected standard customers in 2008, and even now their rates are on average 11% below standard prices.

What else can I do to reduce the amount I spend on energy?

Becoming more energy efficient is the most sustainable way for you to reduce the amount they spend on gas and electricity.

Over two million British Gas customers have already benefited from significant savings by completing our online Energy Savers Report which, recommended savings of up to £444 each.

Complete your report today >>

What are you announcing for customers who have pay as you go meters?

On the 4th February we announced a reduction to our Standard gas prices for customers with a pay as you go meter. This means British Gas is the cheapest major supplier of gas and electricity, and therefore Dual Fuel, throughout Britain at average consumption.  This price reduction makes our pay as you go Standard gas prices the same, on average, as those for customers who pay by quarterly cash cheque.

How/when will meters be updated to reflect the new prices?

These prices will be available for you to collect from your usual top up outlet after the 4th February 2009.

You will simply need to top up to get the new prices applied to your meter. The sooner you top up, the sooner you start using the credit on your meter at the reduced prices.

I normally top up from home, how do I get the new prices?

On this occasion you will need to go to a PayPoint outlet to top up after the 4th February 2010. As soon your meter is updated you will then be able to continue to top up from the comfort of their home using the Home Energy Top Up service