Energy suppliers respond to Which? pressure to help customers on expensive tariffs

As energy suppliers respond to pressure from Which? to do more to engage customers stuck on some of the most expensive deals, new analysis reveals that paying a premium for your energy deal doesn’t guarantee you satisfaction.

Which? analysis of Ofgem data reveals how two thirds (67%) of customers are still stuck on the most expensive deals – standard variable tariffs (SVTs) or prepayment meters. Suppliers with the most expensive SVTs also rank among the lowest for customer satisfaction according to Which?’s energy satisfaction survey.

After the Competition and Markets Authority’s investigation found the energy market was not working for consumers and those on SVTs were least likely to switch, Which? challenged suppliers to outline new ways to engage these customers now, rather than waiting for the energy regulator to intervene.

Fourteen of the 19 responses Which? received set out plans to engage their customers, including trialling simpler bills and new ways of prompting people to switch to a better tariff. All 14 suppliers have promised to share the results of their tests and trials with Which?.

As part of the Which? Fair Energy Prices campaign, supported by more than 500,000 people, Which? will now press these suppliers to deliver their plans and regularly set out what difference this is making to their customers.

Which? has passed the plans to Government and Ofgem and has called on the Government and regulator to report on progress in the market by the end of April.

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

“Recent price hikes show once again that it’s people stuck on the most expensive tariffs that are losing out through a lack of competition in this market.

“With energy prices remaining a top worry for consumers, all companies must do more to engage with their customers and make it easier to switch to better deals. It’s now up to the Government and regulator to hold them to account and ensure that they deliver on promises to help hard pressed energy customers.”

 

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Notes to Editors:

  • All plans submitted, which will be published on the Which? Fair Energy Prices website when the embargo lifts, can be accessed via the following link: https://www.dropbox.com/sh/d8w6r043cp5qbyq/AACyCigjiq0tDT4ct3_uuQi4a?dl=0

  • Which? analysis of Ofgem  ‘Standard variable’ rate tariff (SVT) information. SVT account statistics based on numbers of customer accounts supplied to Ofgem for March 2016. Suppliers included only if they have more than 250,000 customer accounts.

https://www.ofgem.gov.uk/consumers/household-gas-and-electricity-guide/understand-your-gas-and-electricity-bills/energy-plans-what-standard-variable-rate-tariff-and-how-does-it-compare.

  • Energy customers/account holders are the total of electricity, gas and dual fuel accounts, for all payment methods.

  • Tariffs relate to Which? Analysis of Energylinx data for a day January 2017.

  • The most expensive deals include:

  • A standard variable tariff – a supplier’s ‘default’ tariff. It has variable prices that can go up and down with the market, but is usually an energy supplier’s most expensive tariff.

  • Prepayment meter accounts

  • In November 2016, Which? called on all energy companies to find new ways of getting customers stuck on poor value deals to move. Our ‘Fair Energy Prices’ campaign challenged the energy companies to publish plans by 31st January 2017 detailing                                        how they will engage standard tariff customers.

  • The criteria for this campaign included:

    • A CEO endorsement, showing immediate and planned engagement,

    • a demonstration that supplier understand their SVT base – through a process of identification and segmentation,

    • proposed trialling and testing methods of engagement – with published timescales for each stage,

    • plans to capture the measurable impact from successes and learnings for long-term engagement,

    • how results of progress on activities would be published, and

    • how any learnings will be integrated into future continued engagement with customers.

  • Which? is encouraging members of the public to sign its ‘Fair Energy Prices’ petition to support the campaign, which has had over 500,000 signatures.

  • 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: www.which.co.uk/switch

  • Which? found that, on average, customers with the ‘Big Six’ could be saving up to £235 a year by moving to the cheapest dual fuel deal with on the market. 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.

    • Cheapest dual fuel energy deals as of the 11th February 2017 are:

    • IRESA Limited: IRESA Flex4 12 month Fixed – £834

    • Tonik Energy: Positive Energy – £880

    • Toto Energy: Go with the flow Smart – £880

  • In January 2017, the difference between the average Big Six standard variable tariff and the cheapest deal on the market was £235 (£1069 – £834).

  • Top tips for saving money on your energy bills: http://www.which.co.uk/reviews/cutting-your-energy-bills/article/guides

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