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Are energy firms doing enough to get their customers on cheaper deals?

More than half the five big energy companies’ customers are still on pricey standard tariffs, data released today reveals. SSE, British Gas and Eon are the worst offenders. These three have more than 60% of their customers on their standard variable tariffs, figures from energy regulator Ofgem show.

For British Gas, the biggest energy supplier, this equates to more than 4.5 million customers. SSE has the greatest proportion of its customers on standard tariffs (71%), while First Utility has less than a quarter (23%) of customers on its SVT. But First Utility saw a 16% increase in the number of customers on its standard tariff between April and September 2017, while most companies included in the analysis recorded decreases.


Still stuck on your energy company’s standard variable tariff?

You’re paying around GBP300 too much. Compare gas and electricity prices[1] using our independent tool Which? Switch to find out how much you can save.


Are you on a standard variable energy deal?

Standard energy tariffs (SVTs) are variable deals, meaning that the price you pay for your gas and electricity can go up or down. Often, they’re an energy company’s priciest deal.

At the moment, if your fixed energy deal ends, you’ll usually be transferred onto your supplier’s SVT automatically if you don’t choose a new deal. But that’s changing. British Gas[2], Eon[3], Scottish Power[4] and SSE[5] have all said they plan to phase out their SVTs and move customers automatically onto equivalent fixed deals when theirs expire. Until that’s in place, ‘suppliers need to do much more to get all customers a better deal’, according to Ofgem.

British Gas admitted earlier this week that it had not done enough to contact its customers on standard tariffs to encourage them to switch to cheaper deals.

Eon sees biggest percentage decrease of customers on SVT

Overall, the number of customers on companies’ SVTs is declining. At the end of September, 57% were on their company’s standard tariff, compared with 59% three months previously. Eon registered the biggest decrease, with 9% fewer customers on its standard tariff compared with three months ago.

Ovo Energy[6], Scottish Power and Utility Warehouse[7] have seen very little or no change in the number of customers on standard tariffs.

What are energy companies doing to help?

British Gas told MPs that it contacts customers on its standard variable tariff six times a year about cheaper available deals.

But it said in the Commons committee hearing that it could do more. Eon and SSE contact customers on standard tariffs less frequently – at least once per quarter – while First Utility[8] contacts its SVT customers 13 times per year. Which? managing director of home products and services, Alex Neill, said: ‘Progress in moving millions of households off expensive standard tariffs has been painfully slow.

Energy companies shouldn’t be waiting for the price cap – they need to do more to help their customers now. ‘People overpaying on a poor-value tariff should look to switch away to a cheaper deal immediately, as they could save up to GBP312 a year.’

What other help can I get for my gas and electricity bills?

The price cap currently in place for prepayment meter customers will be extended to an additional two million vulnerable customers on standard variable tariffs, Ofgem confirmed today. It says this will help protect these customers from overpaying for energy next winter.

In the meantime, if you need help paying your energy bills, help is available:

  • Fuel Direct[9] – a scheme where energy payments are taken direct from state benefits
  • Winter Fuel Payments[10] are a GBP100 to GBP300 lump sum payment for those aged over 63. The amount you get depends on your age and circumstances.
  • Warm Home Discount[11] – a GBP140 credit on your energy bill if you get the guarantee element of Pension Credit. Others may also be eligible, depending on your supplier’s criteria.

If you don’t think you qualify for these, contact your energy supplier as soon as possible.

Ask if it can offer ways to cut your bill, such as paying by direct debit or going online-only. Energy suppliers follow a code of practice, which means they must take certain steps to help you before cutting off your supply. This can include agreeing a repayment plan.

Contact details for your energy company’s dedicated team are listed in our advice on what to do if you’re struggling to pay your energy bill[12].

Plus, check our guide on energy efficiency[13] to cut your bills by using less gas and electricity.

References

  1. ^ Compare gas and electricity prices (switch.which.co.uk)
  2. ^ British Gas (www.which.co.uk)
  3. ^ Eon (www.which.co.uk)
  4. ^ Scottish Power (www.which.co.uk)
  5. ^ SSE (www.which.co.uk)
  6. ^ Ovo Energy (www.which.co.uk)
  7. ^ Utility Warehouse (www.which.co.uk)
  8. ^ First Utility (www.which.co.uk)
  9. ^ Fuel Direct (www.which.co.uk)
  10. ^ Winter Fuel Payments (www.which.co.uk)
  11. ^ Warm Home Discount (www.which.co.uk)
  12. ^ what to do if you’re struggling to pay your energy bill (www.which.co.uk)
  13. ^ energy efficiency (www.which.co.uk)



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