Loyal energy customers overpay by £3.6 billion per year

Published by Adam Williams on 05 January 2017.
Last updated on 05 January 2017

piggy bank on radiator

Households that stay loyal to their gas and electricity provider are paying a combined £3.6 billion more for their energy than they need to.

Customers typically revert to a standard tariff when they come to the end of any fixed or introductory deal.

But analysis by comparison website uSwitch shows that customers on a standard tariff are charged significantly more each year than if they were on their provider’s cheapest rate.

According to its research, SSE has the highest proportion of its customers on a standard tariff - at 91%. In terms of customer figures (which isn’t representative given some firms are larger or smaller than others), British Gas has the most customers on a standard tariff with 6.6 million – or 74% of all its customers – on this type of deal.

 

uSwitch adds that British Gas customers alone pay £1.1 billion more than they need to, equivalent to £165 per customer per year.

Scottish Power is the Big Six energy provider with the smallest proportion of customers on a standard tariff, with half of its users signed up to other deals. Smaller suppliers tend to have fewer customers on a standard deal, such as Extra Energy, which has just 14% of its customers on this type of product.

uSwitch says even if customers don’t want to move to a new firm, they can save an average of £113 each year by moving to their current supplier’s cheapest deal. Meanwhile, those who are happy to switch to a new provider can save an average of £191.

 

Claire Osborne, uSwitch energy expert, says: “It’s hard not to look at these figures and come to the conclusion that energy companies are not doing enough to get their most loyal customers off expensive standard variable tariffs and onto cheaper fixed deals. This is evidence that loyalty doesn’t pay when it comes to your energy bills.

“Energy companies must do a lot more to help their customers understand the deal they are on and what the alternatives are.

“With one big six price rise from EDF already confirmed to kick in after the winter and more on the cards after the current price freezes end – consumers languishing on sky-high standard variable tariffs should take matters into their own hands by switching now to a much cheaper fixed deal.”

 

 

 

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