Energy companies in ‘last chance saloon’

Four months on from the market investigation that found consumers are collectively overpaying by £1.4 billion for their energy, Which? is challenging energy companies to show how they are engaging with their customers stuck on the worst deals.

Around 16 million people – over half (58%) of energy customers – are stuck on standard variable tariffs (SVT) with a ‘Big Six’ provider, the default and usually most expensive tariff. The Competition and Markets Authority (CMA) has said that more must be done to get energy companies  to engage with these customers. Yet, new Which? research has found that three-quarters (74%) of people said they have not been contacted by their supplier about changing their tariff in the four months since the inquiry was completed.

Which? also found that nearly nine in ten (86%) people said they think it is the energy companies responsibility to help customers better understand their energy usage and nine in ten (89%) say it is the energy companies responsibility to make sure they adequately understand their bill.

Which? is calling on all energy companies to find new ways of getting customers stuck on poor value deals to move.  Our ‘Fair Energy Prices’ campaign is challenging the energy companies to publish plans by 31st January 2017 detailing how they will engage standard tariff customers and take immediate action this winter to deliver against this plan.

Which? will be publishing a scorecard to track the responses from the energy companies.  The Government and the regulator must be ready to act if companies fail to deliver for their customers.

Alex Neill, Which? Managing Director of Home and Legal Services, said:

“This is the last chance saloon for the energy industry. After a two year inquiry, the energy companies now must prove they are taking action to genuinely engage with their customers stuck on the worst deals. The Government and the regulator must be ready to act if energy companies fail to deliver.”

Which?’s latest analysis shows, on average, customers with the ‘Big Six’ could be saving up to £330 a year by moving to the cheapest dual fuel deal on the market this winter. Which? also found that the gap between the average price paid on a standard variable tariff with the ‘Big Six’ and the cheapest deal available has widened up by £111 over the last two years.

– ENDS –

Notes to Editors:

  • Populus on behalf of Which? surveyed a nationally representative sample of 2,100 UK adults between 21st and 23rd October 2016. Populus is a member of the British Polling Council and abides by its rules.

  • Average energy tariffs were calculated for the Big Six variable rate dual fuel tariffs from Energylinx data. The prices calculated were for typical medium household use (12,500kWh per year gas and 3,100kWh electricity), by monthly direct debit. Prices were averaged across all regions. Big Six dual fuel variable (standard) rate tariffs averaged £1,063 per year.  The cheapest dual fuel deal on the market on the 20th February 2016 was Future Energy – Future Connect, typical cost £731 per year. Collective overpaying stat & 4m SVT stat– CMA

  • £1.4billion collective overpayment – Competition and Markets Authority Energy investigation report 2016.

  • 16 million households on a SVT was derived from 2016 BEIS energy statistics reporting that there were 29.9m electricity customers, 86% of whom were with a Big Six supplier according to Ofgem Q2 2016, and 67% of those are paying for their energy via a variable tariff (BEIS). Note we could not separate standard variable tariffs from other variable tariffs, but all variable tariffs for big 6 suppliers were classified as SVT.

  • Standard variable tariff is a supplier’s ‘default’ tariff. It will have variable prices that can go up and down with the market, but is usually the most expensive tariff for energy.

  • Responses from all suppliers will be published on the Fair Energy Prices website once submitted to Which?.

  • Which? is encouraging members of the public to sign its ‘Fair Energy Prices’ petition to support the campaign, which has had over 480,000 signatures

  • to date.Consumers looking for cheaper energy deals can compare deals with Which? Switch, a transparent and impartial way to compare energy tariffs and find the best gas and electricity supplier.

Press Release: , , , , , , , , , , ,