The Big Six energy suppliers were thrust back in the dock today after the Competition and Markets Authority accused them of penalising loyal customers by up to £234.
Its investigation revealed that more than 95 per cent of customers of the Big Six paid hundreds more than they need to for gas and electricity by sticking on standard tariffs rather than switching to lower fixed rate deals.
Who are the Big Six?
They are British Gas, EDF, E.on, Npower, Scottish Power and SSE, although British Gas – owned by Centrica – is by far the largest, supplying some 11m UK households with their energy.
Have they been ripping us off?
Anyone who hasn’t switched energy supplier is paying more than they need to heat and light their home. In the past the differential between the best and worse prices has been more than £300 a year. The CMA said today that the difference between standard tariffs – that most people are on – and lower fixed-rate deals is between £158 to £234 a year, depending on which supplier you use.
Why hasn’t everyone switched to get a better deal?
The CMA said those that haven’t switched are "less educated, less well-off, more likely to describe themselves as struggling financially, less likely to own their own home, less likely to have internet access, more likely to be disabled or a single parent". In other words, the most vulnerable people.
Are there many of them?
There are between 40 per cent and 50 per cent of customers who have been with a supplier for more than 10 years, while for one supplier the figure is as high as 70 per cent. The CMA has concluded that they are "more likely... to think switching is a hassle, that there are no real differences between suppliers and that something may go wrong if they switch".
Is any of that true?
No. switching is getting easier and quicker. Energy companies have cut the time it takes to switch between suppliers to 17 days, down from 5 weeks last year, according to a report from the Department of Energy and Climate Change. Meanwhile there are huge differences between suppliers, not just on cost but on the quality of their customer service. In fact the CMA included in its review evidence that suggests that the customer service provided by the Big Six is “relatively poor”.
What alternatives do I have?
There are now lots of alternative suppliers. In fact a customer satisfaction study by Which? published this year showed that none of the top 10 rated suppliers were from the Big Six. Top was Ecotricity, followed by Good Energy, Ebico and Ovo Energy. The others in the top 10 were Utility Warehouse, Flow Energy, Co-operative Energy, M&S Energy, Sainsbury’s Energy, and First Utility.
How do I find the best deal?
There are a number of online comparison sites that round-up different tariffs. You’ll need to know how much energy you use and how much you currently pay, but suppliers are obligated to provide that information on bills and statements. Use comparison websites that are accredited by the Ofgem Confidence Code. This confirms the information on the website is independent, accurate and up-to-date. However, don’t just buy on price: consider important issues such as how the supplier deals with complaints.Reuse content