As the remaining price cuts from the Big Six come into effect this month, Which? research reveals that the energy market is failing as the majority of customers are still missing out on savings of up to £400 a year.
Ahead of the conclusion of the Competition and Markets Authority’s investigation into the energy market, new Which? research today reveals the recent price cuts announced by the Big Six are dwarfed by the savings customers could be making by switching to an alternative provider.
Customers on standard tariffs with the ‘Big Six’ providers would save just £30 a year, based on recently announced cuts. That’s a 5% reduction for those on a standard single fuel gas tariff and only a 2.6% reduction for those on a standard dual fuel tariff as the cuts only apply to gas, not electricity.
However, these same customers would save up to a massive £400 a year if they were to switch to the cheapest dual fuel deal on the market, or £260 if they were on a gas only tariff and switched to the cheapest deal on the market.
Government estimates only 12% of customers currently switch their gas provider. With seven in ten (71%) gas customers stuck on standard tariffs and nine in ten (88%) households still with the Big Six, the forthcoming energy inquiry must make it easier and engage significantly more people to switch to a better deal.
Our latest consumer tracker reveals 63% of people are worried about energy prices and only a third of people (34%) trust energy providers, so there are high expectations for the outcome of the investigation into the energy market.
Which? has today submitted a dossier with a snapshot of stories from more than 30,000 customer comments to the CMA. The dossier details consumer dissatisfaction with energy companies and the market.
Richard Lloyd, Which? executive director said:
“Millions of people are still paying way over the odds for their energy and levels of switching, while increasing, are still woefully low. We would urge all consumers, especially those on a standard tariff with the Big Six, to switch to a cheaper deal today.
“The stakes are high for the outcome of the energy market investigation and consumers will be expecting action to protect the most vulnerable and bring about fairer energy prices.”
Consumers looking for a better deal can compare deals with Which? Switch, a transparent and impartial way to compare energy tariffs and find the best gas and electricity provider for your needs.
Which?’s Fair Energy Prices campaign calls on the CMA to tackle the problems in the energy market by making switching between providers and tariffs easier and imposing penalties on those suppliers who don’t protect the most vulnerable. To date over 360,000 people have supported our campaign.
Notes to Editors
- Methodology on £30 / £400 savings: Energylinx data were used to examine the energy deals available to consumers on the 20th February 2016. We calculated average energy tariffs for the big six variable rate dual fuel tariffs. The prices calculated were for typical medium household use (12,500kWh per year gas and 3,100kWh electricity), across all payment methods. Prices are averaged across all regions. Big Six dual fuel variable (standard) rate tariffs averaged £1,134 per year. The cheapest dual fuel deal on the market on the 20th February 2016 was Flow Energy Connect 6, typical cost £737 per year.
- Switching data: Proportions of customers switching Gas provider in Q4 2015 from DECC Quarterly Energy Switching Statistics (QEP2.7.1).
- 88% households with Big Six: Big Six market share data from Cornwall Energy Domestic Energy Market snapshot 31st October 2015.
- 71% on standard tariff: proportions of gas customers on variable tariffs in Q3 2015 sourced from DECC domestic gas customers by region (QEP 2.5.2).
- Worry about energy prices and trust in providers sourced from Which? Consumer Insight TrackerJanuary 2016. Populus on behalf of Which? surveyed a representative sample of 2,090 UK adults for the January wave. Populus is a member of the British Polling Council and abides by its rules.