Product Promotion Network

More than half of energy customers are on poor value deals

Six in 10 energy customers are on out-of-contract gas and electricity tariffs and paying over the odds for the gas and electricity they use, the energy regulator Ofgem revealed. Almost as many (58%) customers admit they’ve never changed energy supplier, or have switched only once. Those who do switch can be paying around ?300 less for the same gas and electricity.

Although the number of customers on poor value (standard variable) tariffs has fallen in the last two years, progress ‘isn’t happening fast enough’ Ofgem said in its annual State of the Market report. Which? managing director of home products and services, Alex Neill, said: ‘Today’s report makes it crystal clear that the energy market is not working for consumers, with far too many people still stuck on expensive standard variable tariffs. As the temperature drops and bills start rising, it is vital that the Government’s interventions really do fix the broken energy market.

‘Our advice to consumers who aren’t getting a good deal is to switch to a better deal now, before you find yourself overpaying for another winter.’

Use Which? Switch to compare gas and electricity prices[1] and find out if you could save around ?300, as the regulator says.

Are energy prices rising?

Energy bills are higher in real terms than they were 10 years ago, Ofgem found, though we’re paying less than in 2013 when prices were at their highest. Longer term, wholesale energy prices have been falling.

They are now ‘just beginning to creep up or stabilise’. But ‘if competition was working really well, we’d expect to see the benefits felt by all consumers’, Ofgem said. There’s a ?356 difference between the most expensive standard tariff from one of the Big Six energy firms and the cheapest tariff on the market available across England, Scotland and Wales at the moment, our research reveals.

The cheapest tariff is from small supplier Iresa[2]. So switching could save you a sizeable chunk of money on energy this winter.

Are you overpaying for gas and electricity?

If you have a prepayment energy meter[3], electric heating[4] or are off the gas grid in a rural area or rent your home, you’re more likely to be on a poor value deal, the report found. One in 10 consumers – that’s 2.5million households – are in fuel poverty in England (BEIS, 2015).

You’re in fuel poverty if the amount you need to pay is above average, and if you spent that amount your leftover income would be below the poverty line. Children and young people are more likely to be in fuel poverty; levels of it are growing fastest in households where the youngest person is aged between 16 and 24. Those in fuel poverty are more likely to be on poor value deals – and therefore need more help paying bills.

Ofgem’s report said: ‘It’s a paradox that those who can afford their bills are more likely to get good deals anyway. Meanwhile, those on the lowest incomes tell us they’re least likely to have switched supplier.’

Get help paying your energy bills

If dropping temperatures bring with them a rising dread of big energy bills, check whether you’re eligible for support from your energy company or the government:

  • The Warm Home Discount[5] is a ?140 payment available mainly to pensioners and those who receive certain means-tested benefits.
  • Free insulation or a replacement boiler[6] from energy suppliers, if you meet their criteria.
  • Winter Fuel Payments[7] are for households with someone born before August 1953. The payment helps with the cost of gas or electric heating.

    If you’re aged 63 you could get ?200; if you’re over 80 it’s ?300.

Even if none of these apply to you and you’re struggling to keep up with gas and electricity payments, contact your energy supplier. You can agree with your supplier what you can pay; make a plan and it cannot cut you off. Our guide has more on help available if you’re struggling to pay your energy bill[8].

You can save hundreds of pounds on your energy bills each year by making small changes at home to how you use energy.

Check our 10 tips to save money on energy[9] to get started.


  1. ^ compare gas and electricity prices (
  2. ^ Iresa (
  3. ^ prepayment energy meter (
  4. ^ electric heating (
  5. ^ Warm Home Discount (
  6. ^ Free insulation or a replacement boiler (
  7. ^ Winter Fuel Payments (
  8. ^ help available if you’re struggling to pay your energy bill (
  9. ^ 10 tips to save money on energy (

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