Are you on a pricey standard gas or electricity tariff? Millions of people are paying more than they need to for their energy – and they’re often the most vulnerable.
The Competition and Markets Authority’s (CMA) investigation into the energy market is reaching its final stages. So as part of our Fair Energy Prices campaign we’re calling for further action to tackle the millions of people who are paying over the odds on expensive standard tariffs.
Millions stuck on expensive tariffs
We’ve looked at the Government’s latest switching data, and it conclusively shows that switching levels over the past two years haven’t reduced the number of people on standard tariffs.
Approximately 21 million electricity and 16 million gas customers were on standard tariffs at the beginning of 2014. Has this improved since recent reforms which forced suppliers to reduce the number of tariffs and show their cheapest deals on bills? No.
The number of customers on standard deals is almost exactly the same today. That’s around three quarters of all energy customers paying more than they need to. It was too many people in 2014 and it’s too many people today.
The cost of not switching
Why does this matter? Well a standard electricity tariff costs on average £54 more than other deals per year, and a standard gas tariff is an estimated £75 more a year. That’s a fair chunk or money, but it’s not fair on energy customers.
In short, the number of customers switching has stayed pretty static. You might be a regular switcher and engaged in the market, but millions of people aren’t. And these people are often the most vulnerable. People like Lesley from Pembrokeshire:
‘I have very little money that needs to stretch far. I would like to use my heating in the winter, not just when people visit. Put the oven on to cook, not just for others. It’s hard having no money and trying not to worry others.’
Action needed from the CMA
With switching rates so stagnant, we need the CMA to use its long-running inquiry to ensure that many more people are confident to switch to better deals. It also needs to take action to protect vulnerable customers from paying over the odds.
So when the CMA reports back in June next year, we want to see it:
- Tackle the number of people on poor value standard tariffs
- Make it easier to compare and switch through simple pricing
- Penalise suppliers who fail to protect the most vulnerable customers
Do you regularly switch energy deals? Do you struggle to pay your energy bills, or know someone who does?