Staying loyal to energy companies costs customers nearly £4 billion per year

Loyal energy customers are paying a staggering £3.6 billion per year more for their energy than they need to by remaining on their supplier’s standard tariff, according to new analysis from Uswitch.com, the independent price comparison and switching service.

British Gas has the most standard variable customers – some 6.6 million or 74% of its customer base. Collectively these customers pay nearly £1.1 billion more than if they switched to the cheapest deal on the market.

SSE, however, has the highest proportion of customers on standard variable rates of any of the big six providers at 91%. This compares to ScottishPower which has the lowest proportion of all the big six at 50% – and small supplier Extra Energy which has only 14% of its customers on standard variable tariffs.

ScottishPower’s customers pay the most of all the big six customers for staying loyal to their supplier, with a standard variable tariff that is £129 higher than its cheapest deal. However, the most expensive standard variable tariff overall is with Extra Energy at a staggering £1,130 – £66 more expensive than the average big six standard variable tariff.

Table 1: The cost of loyalty – number of customers on energy suppliers’ standard variable tariffs (SVTs) and the difference between their best deal – click here to view table.

Standard variable tariffs are often the most expensive energy plan a customer can be on. In many cases customers on a fixed plan are automatically rolled onto a standard variable tariff once it expires. According to Uswitch data, energy customers who don’t want to switch supplier could still save an average of £113 if they moved to their supplier’s cheapest tariff, while those wanting to save as much as possible should consider switching to the cheapest deal on the market to save an average of £191.

Claire Osborne, Uswitch.com energy expert, says: “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.

“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.”

Find out how you could save over £1,000 a year with Uswitchhere.

FOR MORE INFORMATION

Ailene Barr

Phone: 020 3872 5610

Email: ailene.barr@uswitch.com

Twitter: @uswitchPR

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