SSE is to cut energy prices by 5.3% from 29 March, the supplier announced on Thursday (28 January). The company is the second of the Big Six energy giants slashing prices and said it would save customers £32 a year.
On 20 January, SSE's rival E.on announced a 5.1% price cut effective from 1 February. The energy companies are reviewing their prices after pressures from ministers and consumer watchdog the Competition and Markets Agency (CMA) to adapt to low wholesale prices.
Energy Secretary Amber Rudd said SSE had "taken a step in the right direction". She added: "I urge other suppliers to follow suit. I'm absolutely clear that the market must provide a fair deal for consumers and that's why I've been pressing energy companies to put their customers first and pass on savings to them."
The energy sector has been under mounting pressure to lower prices because of the high costs for households. According to the CMA, for low income families, 10% of total expenditures goes to energy bills.
The CMA also found consumers could save £160 on bills by switching providers, but energy companies make it more complicated for customers to change companies, the watchdog has ruled. Meanwhile, energy costs for the suppliers hit its lowest point in five years at the end of 2015, according to market information provider ICIS.
Personal finance experts have already scrutinised the cut by SSE, saying it is not enough. The £32 cut accounts for 2.7% of the £1,200 average annual energy costs for household, based on findings by the CMA.
Martin Lewis, founder and editor of Money Saving Expert said SSE's price reduction was "trivial". He said: "Energy firms must be whooping for joy that they can get away with such small cuts and have the energy minister praising them. Yet the real picture here is that even after cuts the vast majority of households in the UK are massively overpaying for their energy."