Cut your power bills? Try the bank

ONE of the big High Street banks is offering its customers power and telephone services, challenging the traditional providers.

Lloyds-TSB claims customers will make 'sizeable savings' on their gas, electricity and telephone bills. It says a family using its service for both energy and phone bills could end up £170 a year better off.

The package, sold under the brand name 'Ideal from Lloyds-TSB', went on sale through its branches this week.

The bank says the new service is also more convenient as it combines the charges for all three services on one monthly bill which can be paid by direct debit, compared with separate quarterly bills from traditional suppliers.

Lloyds-TSB claims it will undercut many of the power and telephone deals currently available to families. The move is similar to ventures by Sainsbury's and Tesco. Such companies can market utility services to their existing customers through monthly bills or loyalty card schemes.

Lloyds-TSB and the supermarkets effectively put their brand names on existing services offered by power and telecommunication companies.

In this case, the bank buys gas and electricity supplies at wholesale prices from Scottish Power and a telephone service from Cable & Wireless. It can undercut other power and telecommunication companies by simply operating at a lower profit margin.

Lloyds-TSB claims that a typical family living in the East Midlands would pay £450 a year for gas with British Gas and another £350 on electricity supplied by Powergen - a total of £800.

The bank's 'Ideal' package would offer an identical amount of gas at £365.50, while electricity would cost £308.39 - a total of £673.89 and a saving of £126.11.

The same family would typically spend £25 a month - or £300 a year - with BT's Together Option 1 package, given an even split of daytime, evening and weekend calls. Equivalent call time with Ideal would cost £21.32 a month - £255.84 a year - saving £44.16.

The bill from Lloyds-TSB would look like any other utility bill, stating how much gas, power or telephone units have been used in the month with a total charge figure. Telephone bills from the bank would also provide itemised details including individual call costs and duration.

Lloyds-TSB's retail banking executive director, Peter Ayliffe, said: 'Hundreds of thousands, if not millions, of UK consumers are paying over the odds for these essential services and we're using the strength of our buying power to get them a better deal.

'No other high street bank is providing this service, making this yet another compelling reason for customers to choose us. Our customers have told us this is exactly the kind of service they want and by offering them a combined bill paid by direct debit, we're also making their lives simpler.'