Energy bills have risen by a shocking 73% in the last decade according to exclusive analysis by consumer group Which? – an average increase in annual bills of around £580 per household.
With annual bills approaching £1,400, Which? is calling for the Competition and Markets Authority (CMA) to set out how it will shake up the energy market when it reports the findings of a year-long investigation later this month.
Spending on energy rose from 2% of household budgets in 2004 to 4% a decade later. Which? figures also show that sky high energy prices are our biggest concern, with two-thirds of people worried about the size of their bills. Three-quarters of households are on pricey standard tariffs, often hundreds of pounds more expensive.
But switching rates are only one part of the problem. Making it easier to switch won’t help people to find the best deal in a complex market that is not set up to work in their interests.
People should be confident they’re paying a fair price for their energy, so Which? is calling for simple pricing, like you see on a petrol forecourt, so consumers know they are making the right choice when they switch suppliers. The consumer champion is also calling for a price to beat, to act as a benchmark so anyone stuck on an expensive tariff is protected even if they don’t switch.
Which? executive director, Richard Lloyd, said:
“There’s no doubt that the energy system is failing consumers and needs a shake up. Just one in five of us trust energy suppliers to charge us a fair price. The CMA has a great chance to fix things but must be brave, and not shy away from tough decisions that show it’s on the side of consumers.”
More than 200,000 people have backed Which?’s Fair Energy Prices campaign calling for the CMA to take action on energy prices and make bills fairer.
Notes to Editors
1. Yearly energy spending statistics sourced from Which? analysis of the Living Costs and Food Survey 2013 (Office for National Statistics). Energy spending includes all expenditures on electricity, gas and other domestic fuels. Historical spending data from the Living Costs and Food Survey were adjusted to 2013 prices based on the overall Consumer Price Index (ONS).
2. Exclusive Which? analysis of energy spending change 2004-2013 shows:
- Average weekly energy expenditure has almost doubled from £15 in 2004 to £27 in 2013 (in 2013 prices).
- That is the equivalent of an annual increase in energy spend of approximately £580 per household (in 2013 prices).
- Average household expenditure on energy increased by 73% between 2004 and 2013.
Source: Which? Analysis of Living Costs and Food Survey (2013)
3. 66% are worried about energy prices. Populus, on behalf of Which?, interviewed a representative sample of 2062 UK adults between 20th and 21st May 2015. Data were weighted to be demographically representative of all UK adults.
4. 19% of people trust energy companies to charge a fair price for their energy. Populus, on behalf of Which?, interviewed a representative sample of 2076 UK adults between 6th and 8th March 2015. Data were weighted to be demographically representative of all UK adults.
5. If you think you might be missing out on the cheapest energy deal you can use Which? Switch to 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 and tariff ratings to help you decide on service as well as price.