Customers of Big Six energy firms have paid out an extra £850 each in the last five years
PUBLISHED: 08:29 29 August 2017 | UPDATED: 08:29 29 August 2017
Remaining customers of the Big Six energy firms have forked out an extra £7.3bn over the last five years, a new report reveals.
Families who held accounts with the biggest firms – including British Gas, SSE, E.ON, Npower, EDF and Scottish Power – for at least five years paid out on average £853 more than they needed to over the period, according to Ofgem data compiled by energy provider Bulb.
The report explained that cheaper tariffs offered by Big Six firms to “entice” new customers often expire within two years.
At that point customers are usually transferred to standard variable tariffs, which cost up to 30% more than their original plan.
The report went on to calculate the so-called “loyalty fee”, which measures the annual price difference between the average standard variable tariff at a Big Six firm compared to their cheapest tariff.
It found that the average loyalty fee for a UK household was £852.75 over five years.
Bulb co-founder Hayden Wood said: “Loyalty towards a brand is often rewarded, yet households who’ve put their trust for years in a single energy company are being forced to subsidise others who switch every 12 months.”
He added: “These latest numbers show that so-called standard tariffs no longer have the customers’ best interests at heart. The Big Six need to show that they’re putting customers first, instead of profits.”
A recent poll by uSwitch found a third of Brits are already concerned about paying their energy bills this winter and more than half are struggling with their household finances.
British Gas became the latest Big Six energy supplier to hike prices at the start of August, when it confirmed that it was ramping up the cost of electricity by 12.5% for 3.1 million customers, despite falling wholesale prices.