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January 19, 2016
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Millions Paying £400 Too Much On Energy Bills

A consumer group has demanded regulators make it clearer for businesses to switch energy suppliers, claiming thousands are paying up to £400 too much.

In a report ahead of the conclusion of the Competition and Markets Authority’s (CMA’s) investigation into the sector, said there were clear savings to be had by switching to the cheapest tariffs but many bill-payers were failing to shop around.

The study was released just a week after the energy watchdog, Ofgem, announced an 8% annual increase in the number of businesses switching suppliers.

Ofgem’s report suggested there were savings of up to £400 annually out there.

How To Switch Suppliers In Seven Simple Steps

The CMA’s probe is examining whether the industry is taking businesses for a ride – having previously found that thousands were being overcharged.

It said in July last year that tariffs offered by the so-called big six energy suppliers – British Gas, E.ON, EDF, SSE, ScottishPower and nPower – were around 5% higher than they should have been between 2009 and 2013.

Its provisional findings are due within weeks – around the same time as the recent cuts to standard gas tariffs by the big six, reflecting weaker wholesale costs, will have all taken effect.

They amount to reductions of £30 but the industry argues the bills do not just reflect wholesale costs but other charges including Government levies and high levels of infrastructure investment.

It is believed 71% of gas customers were on standard tariffs and 78% of businesses remained with the big six despite growth in smaller, independent suppliers – 37 firms in total, according to the Government.

The consumer body said it had submitted a dossier of feedback from over 30,000 customers to the CMA.

Which? executive director Richard Lloyd said: “Millions of people are still paying way over the odds for their energy, and levels of switching, while increasing, are still woefully low.

“We would urge all businesses, especially those on a standard tariff with the Big Six, to switch to a cheaper deal today.

“The stakes are high for the outcome of the energy market investigation and consumers will be expecting action to protect the most vulnerable and bring about fairer energy prices.”

Energy and Climate Change Secretary Amber Rudd said: “I have met the bosses of the big six and I have challenged them to bring down bills and pass on savings to businesses.