Energy customers ‘pay too much’
- Credit: PA
Customers of the Big Six energy suppliers are paying up to £234 a year too much in gas and electricity bills, a competition probe has found.
The Competition and Markets Authority (CMA) said 95% of dual fuel customers could have saved by switching tariff or supplier.
It said the average saving available to these customers was between £158 and £234 a year depending on the supplier.
The findings were the latest update from the CMA’s full-scale probe into the sector which is dominated by the Big Six firms - Centrica, SSE, npower, EDF, Scottish Power and E.ON.
It has updated a statement it published at an earlier stage of the investigation in July last year. The CMA said it had not yet reached any conclusions. Provisional findings will be published in May.
The probe also highlighted how customers stuck on more expensive, standard types of tariff tended to be less educated, less well-off, less likely to own their own home or have internet access and more likely to be disabled or a single parent.
These customers were more likely to be with an “ex-incumbent” supplier - the gas or electricity provider that served the area before the market was opened up to competition in the 1990s.
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They tended “to think switching is a hassle, that there are no real differences between suppliers and that something may go wrong if they switch”.
But the CMA found that from 2011 to 2014, the Big Six suppliers made 12% more per unit for electricity and 13% for gas from those on these standard variable tariffs (SVTs) than customers on fixed or other deals.
It said the next stage of its investigation would focus on understanding which customers do not switch and why, and identifying the nature of “barriers to switching”.
Half of customers surveyed said they had never switched, and around a third said they had never considered switching or thought it was impossible.
Those in the latter category tended to include people aged 65 and over, those in social accommodation, customers with no qualifications and those on lower incomes.