CONSUMER groups have condemned a decision by Perth-based energy giant SSE to increase its dividend to shareholders by 3% two months after introducing an 8.2% increase in energy bills.

The move came as the company said it expected profits to rise by 8.8% to £1.54 billion this year.

The supplier was the first of the big six to raise household prices this winter, increasing them from mid-November after claiming it was "sorry" to do so but had no choice because of rising costs.

The dividend and profit increase - despite both declining energy usage and customer numbers - drew swift criticism from consumer groups and the Labour Party.

Sarah Beattie-Smith, of Citizens Advice Scotland, said: "At a time when so many households are still struggling with high bills and public confidence in the energy companies is so low, It's very disappointing that SSE have chosen to put their shareholders ahead of hard-pressed consumers.

"Their customers will find it hard to understand why their bills had to increase yet again in order to fund this dividend for shareholders."

Next week the CAB service will be running a national information campaign to offer special advice to people on how to cut their fuel bills.

Caroline Flint, Labour's shadow energy secretary, said: "Yet again we see an energy company increasing its profits and payouts to shareholders on the back of spiralling bills for hard-pressed consumers."

Richard Hall, director of strategic infrastructure at Consumer Futures, said: "The increase in SSE profits contrasts with declining affordability. The sector is riding out tough economic times better than its customers are, so there's a need to help the latter. It should offer customers respite by bringing forward its price cut to an earlier date."

Bills will be cut by 3.5% for all of the group's nine million residential customers from March 24 after the group passed on savings from the Government's green levy shake-up, but it still means an overall above-inflation rise for hard-pressed households.

SSE chief executive Alistair Phillips-Davies said: "It is encouraging that SSE is on course to deliver real growth in the dividend and increases in adjusted earnings per share and adjusted profit before tax."