According to think tank IPPR, consumers who have not switched energy supplier are being charged an average of £90 more for gas and electricity than those who have.
At present there is a gap of almost £300 between the cheapest and most expensive energy tariffs available on the market.
‘Customers pay more for their energy than they need to’
Speaking on the findings, IPPR Senior Research Fellow Reg Platt said: “Our new analysis shows how the biggest energy companies add a surcharge to the tariffs of customers that they inherited from their time as monopoly suppliers.
“This means that these customers pay more for their energy than they need to. It also means smaller suppliers are at an unfair disadvantage because they have not inherited any customers and must compete against the low prices that the big companies offer to people who have switched.”
Platt added that Ofgem’s competition review needed to make radical changes if the market was to become truly competitive.
At present small suppliers such as First Utility and Ovo Energy are offering the cheapest gas and electricity plans on the market.
Ofgem: Changes are being made to energy market
Ofgem promptly responded to IPPR’s report and denied suggestions that not enough was being done to protect consumers from predatory pricing.
A spokesperson for the energy regulator said: “It’s wrong for the IPPR to suggest that Ofgem has not tackled the issue of new customers paying higher prices than those who have remained with their current supplier.
“Our reforms [also known as the Retail Market Review – Ed] for a simpler, clearer, fairer market address this as since the end of December 2013 all suppliers have been restricted to offering just four tariffs per fuel. They must also ensure that they offer the same deals to new and existing customers.”
In addition, Ofgem highlighted recent measures banning expensive “evergreen tariffs” and new rules obliging suppliers to inform customers if they offer a cheaper tariff than the one they are already on.