Customers of Monzo will soon be able to switch energy deals using its banking app and earn up to £50 credit towards their bills.
The digital challenger bank has announced a partnership with two challenger energy providers, OVO Energy and Octopus Energy to give customers a seamless energy switching experience.
The bank says switching using its new functionality will take as little as six minutes, and customers could receive up to £50 credit when they switch accounts.
Both OVO and Octopus offer renewable energy tariffs and are recommended by several leading consumer ratings firms.
Tom Blomfield, chief executive and co-founder of Monzo comments: “We want to help take the hassle out of finding a fair deal, and switching suppliers when you do.
“By working with Octopus Energy and OVO Energy, Monzo customers will be able to conveniently access fair energy tariffs that come with quality customer service.”
Adrian Letts, chief executive of retail, OVO Energy adds: "With more people using smartphones to access everything in their lives, monitoring and controlling your household energy use should be no different.”
Greg Jackson, chief executive of Octopus Energy says: “We love working with innovators in other sectors to bring fair pricing to customers who've been ripped off for too long. Banking and energy have both failed to deliver value and service, but in energy the issue is even more urgent because we need to tackle climate change.
“Octopus is determined to make energy both cheaper and greener, and we are thrilled to be working with Monzo to spread that message.”
How do the deals stack up?
At the beginning of April, the government’s vaunted energy price cap was raised by the regulator Ofgem to £1,254 a year.
Most of the ‘Big Six’ energy providers were quick to raise their standard variable tariffs to meet the cap, costing millions of energy customers over £110 more per year.
Monzo says customers that switch through the app to either OVO or Octopus will be put onto a standard 12-month fixed rate tariff from each firm.
Octopus currently offers a 12-month fixed rate deal for £994.
Anyone who switches to Octopus Energy will get £40 credit, and to OVO Energy £50 credit.
Once a customer has completed an energy switch and made their first payment, the credit will be applied to their energy account within 45 days.
Here's the list of the current top 10 best buy energy deals:
|Top 10 cheapest consumer energy tariffs||Annual cost|
|Outfox the Market One Variable Tariff 4.0 - Paperless||£880.20|
|Outfox the Market FIX'D 19X 6.0 - Paperless||£893.26|
|Utility Point Up Variable Direct Apr19 - Paperless||£895.38|
|TOTO Energy weflip Smart Simple Variable Saver - Paperless||£896.77|
|TOTO Energy weflip Simple Variable Saver - Paperless||£896.77|
|Eversmart Energy She's Electric - Paperless||£900.88|
|Utility Point Just Up 19 Wk15 Direct - Paperless||£908.69|
|Avro Energy Simple and SuperSavvy - Paperless||£911.18|
|The People's Energy Company People's Energy Fixed Tariff April 2019||£917.78|
|Breeze Energy Breeze Fixed Sunshine Saver 2019 - Paperless||£919.96|
Sally Jaques, head of energy at energy auto-switching service weflip, comments: “According to the energy regulator, Ofgem, 11 million households are paying through the nose for their energy bills because they are unnecessarily languishing on their providers’ most expensive tariffs.
“While any addition to aid energy switching is a positive, this latest offering from Monzo limits the customer to just one supplier, meaning they could potentially be missing out on the best deal in the market.
“Add to this the fact customers aren’t automatically switched when a better deal is available, as it stands there are still better options out there for those who want to remove the hassle of switching altogether."
The Moneywise verdict
Monzo is rightly tapping into a market that suffers from significant customer lethargy. Millions of energy customers still languish on the most expensive default standard variable rate tariffs, despite a wide array of firms and tariffs available.
Its wish to make switching on to cheaper energy deals easy for its customers, while rightfully making a commission for the service, is a great idea. The big providers are too dependent on customer inaction, which fosters a lack of competitive pricing.
However, it still pays for individual energy customers to shop around for the best value deal, by using an energy price comparison site that includes tariffs from a wider variety of suppliers.