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Loyal to your energy supplier? It’s costing you £191 more per year

UK consumers spend £3.6 billion more per year by not switching away from their suppliers’ expensive standard plans

row of houses

In December, Ofgem revealed that 20 million UK households are on standard energy plans. Now, new research from uSwitch.com shows that it’s costing them £191 more per year on average.

‘Languishing’ on ‘sky-high standard variable rate tariffs’ with price rises on the way

Standard variable rate tariffs are the ‘default’ tariffs of energy suppliers, and often the most expensive.

These are the tariffs customers are automatically placed on when they move house, and the plans they are rolled on to when their fixed rate plan expires.

These are also the plans of customers who have never switched supplier — and that loyalty has a price tag of £3.6 billion.

Further, customers on these variable rate plans are not protected from price rises. uSwitch Energy Expert Claire Osborne points out:

“With one big six price rise from EDF already confirmed to kick in after the winter and more on the cards after the current price freezes end – consumers languishing on sky-high standard variable tariffs should take matters into their own hands by switching now to a much cheaper fixed deal.”

Baby steps: switching plans without switching supplier

Surprisingly, customers don’t even need to switch supplier to save hundreds per year, as they can simply switch to a cheaper deal from their own supplier.

ScottishPower customers, for example, can switch from the company’s standard tariff to its cheapest one for a savings of £129 per year. Extra Energy customers could save £202 by switching from the supplier’s standard plan to its own cheapest deal.

However, the savings grow to £191 per year if households switch to the cheapest plan on the market.

‘Evidence that loyalty doesn’t pay’

Despite requirements to notify customers of cheaper plans available to them, Osborne believes more can — and should — be done:

“It’s hard not to look at these figures and come to the conclusion that energy companies are not doing enough to get their most loyal customers off expensive standard variable tariffs and onto cheaper fixed deals. This is evidence that loyalty doesn’t pay when it comes to your energy bills.

“Energy companies must do a lot more to help their customers understand the deal they are on and what the alternatives are. The CMA’s package of remedies will provide more of an incentive for companies to do this, so it needs to be implemented now and given time to succeed so that competition can drive greater choice, better customer service and reduce bills.”

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  • David Janes

    I switched to Sainsburys at the end of October 2016, so far I have saved nearly £250, if it continues that will be £1000+ in a year. Tip read the small print on your British Gas bill they have to tell you who is the cheapest by law. If you cannot find it phone them they will tell you

    • Angela Pacey

      Wow how much were you spending before. I checked out Sainsburys and they were going to cost me about £300 a year more!

    • https://www.uswitch.com/gas-electricity/ Lauren Vasquez

      Hi David – It’s worth clarifying that suppliers are only required to tell you about their own cheapest similar tariff via your bill. That means they do not tell you about another supplier’s cheaper deal. Also, if you are on a variable plan, it will only tell you about another variable cheaper plan – not a cheaper fixed plan, for example. You may have been notified about Sainsbury’s via BG because Sainsbury’s energy is actually provided by British Gas. https://www.uswitch.com/gas-electricity/suppliers/sainsburys-energy/

  • Unimpressed

    It would help if the call centre staff in India (for British Gas) actually was knew something of the tariffs they try to sell. Just last week, after a protracted discussion during which I was interrupted several times despite trying to explain my query, I was asked to chose between 3 tariffs without ANY detail of the costs, at which point I told the rep thst I would deal with the query myself. And I am: I am leaving British Gas for another supplier where the staff know and understand what they are selling!

  • Scott fae Dundee

    Why don’t you do a piece on the not so smart – smart meter campaign. Apparently they are linked to the supplier that installed them for you. So if like me you decide to bin your supplier when your contract runs out to get a better deal elsewhere, guess what. Your smart meters don’t transfer to your new supplier and get disconnected. So it’s back to taking meter readings again with 2 useless smart meters installed. I switched from BG to AVRO last month.

    • Dana

      I wander if the preused smart meters go for recycling ?

  • William McNeice

    I’m with Scott fae Dundee. Got a smart meter from Scottish Gas at the first opportunity. Switched to Scottish Power who didn’t provide smart meters at the time but as soon as SP offered to provide a smart meter I booked an installation only to be the install couldn’t go ahead because the meter installed by SG couldn’t “talk” to SP. Still having to take and submit my own meter readings. What happened to the age of technology?
    Bill (Greenock )

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