Millions still stuck on most expensive tariffs

As the Competition and Market Authority’s (CMA) energy market investigation reaches its final stages, our ‘Fair Energy Prices’ campaign is calling for ​further ​action to tackle the millions of households paying over the odds on expensive standard tariffs.

The Government’s latest data shows ​that ​switching levels over the past two years ​have ​failed​ to reduce the numbers of people on standard tariffs. Since the beginning of last year, the levels of people on ​a ​standard ​electricity ​tariff – which costs around £54 (or 9%) more than other deals on average – remained stuck at an average of 75% (approx. 21 million customers).

Standard gas tariffs fared no better, stalling at 73% (approx. 16 million customers) at the beginning of 2014 and have remained, on average, at that level until now. A standard gas tariff costs an estimated £75 (or 10%) more than other deals.

According to the government’s figures, in 2014 11% of people switched electricity supplier and 10% switched their gas supplier but neither of these figures have significantly impacted​ on the number of people on standard tariffs.

It’s clear that recent reforms to reduce the number of tariffs and to force suppliers to show their cheapest tariff on bill statements, have not ​significantly increased consumer engagement with this essential market. ​With this inquiry the CMA must thoroughly test its proposals with consumers to ensure they will encourage more people to make a switch ​and take​ action to ensure that the most vulnerable customers​ are protected.

When the CMA reports back in June next year, we want to see it:

  • Tackling the number of people on poor value standard tariffs
  • Making it easier to compare and switch through simple pricing
  • Penalising suppliers who fail to protect the most vulnerable customers

Which? executive director, Richard Lloyd said:

“It’s clear that the people who would benefit the most from switching suppliers are still not moving. The regulator must reverse this trend if its lengthy investigation is to bring about  a competitive market with fair energy prices.

“The CMA must find ways to ensure many more people are confident to switch to better deals and at the same time protect vulnerable customers from paying over the odds.”

Which?’s top tips on reducing your energy bill this winter include:

  • Switching supplier – use a price comparison site like the Which? Switch website to see if you could be on a better deal. Get prepared beforehand and have your postcode, current gas and electricity supplier and the name of your tariff to hand. This can be found on your latest bill or annual statement or contact your supplier.
  • Check your boiler – replacing an old G-rated gas boiler which has no controls with a new condensing model, including a programmer, could trim up to £340 a year from the gas bill of a typical home.
  • Insulate – adding loft and solid/cavity wall insulation and draught-proofing windows, doors and loft hatches will make your home feel warmer.
  • Turn down your thermostats – Reducing room temperatures by just 1ºC can cut heating bills by up to £85-£90 a year in a typical home, according to the Energy Saving Trust.
  • Energy grants – the government has various grants available to help you through the winter so it’s worth checking if you could be eligible. Which? has published a free guide.

Notes to Editors

  1. Which? has been campaigning for the CMA to put consumers at the heart of its energy inquiry which is a once in a decade opportunity to fix the broken energy market. More than 330,000 have already pledged their support for our ‘Fair Energy Prices’campaign
  2. Sources: DECC energy transfer statistics (to June 2015) published Sept15; DECC Variation in tariff types and energy bills in 2014, published March 2015; DECC Quarterly Energy Customer Numbers (to June 2015) published Sept15
  3. Energy bill £ values were derived from the DECC variation in tariff type and energy bills 2014 report assuming standard consumption of 3,800kWh for electricity and 15,000kWh for gas.
  4. If you think you might be missing out on the cheapest energy deal you can use Which? Switchto compare energy prices. Which? Switch is an independent service that searches the market to provide a comprehensive, transparent and impartial view of your gas and electricity options, including supplier satisfaction ratings to help you decide on service as well as price.


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