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Seven in ten Brits stuck on expensive Standard Variable Tariffs but half the population don’t even realise it

  • Seven in ten (17 million) customers are on poor value standard variable tariffs (SVTs), overpaying by up to £288 a year each

  • But one in two (52%) do not believe they’re on an SVT and a further 26% aren’t sure

  • Over three quarters (85%) of consumers have never heard of the phrase SVT

  • When asked what SVT meant, only 1% said it was an energy plan

  • Majority of bill payers want clearer annual reminders from their energy supplier if they are on a poor value tariff

Seven in ten energy customers in Britain (17 million) are languishing on expensive deals known as standard variable tariffs (SVTs), potentially throwing away nearly £300 each but half of all customers don’t think they’re on one.

The new research from Uswitch.com, the price comparison and switching service, demonstrates a distinct lack of awareness amongst consumers, with over three quarters (85%) admitting to never having heard of the phrase ‘SVT’. When shown a list of possible phrases that it could refer to, only 1% could correctly identify SVT as an energy plan.

Once they had the term explained to them, 35% of respondents said they realised that SVTs are amongst the most expensive deals on the market, but just one fifth (21%) of customers knew for definite that they were on one while 52% of customers were sure they weren’t.  Furthermore, only 26% recalled being contacted by their energy supplier in the last 12 months to inform them that they could be saving money by moving to a cheaper deal.

The majority of consumers feel that the responsibility for alerting them to changes to their tariff and possible savings should lie with their energy company. Over half of bill payers (56%) believe that energy suppliers should send an annual reminder that they could save money by switching, whilst almost a third (31%) feel that consumers should be given more information about the tariff they are signing up to.

Other initiatives that would motivate more people to switch to a better energy deal include being sent a letter that is difficult to ignore (e.g. in a red envelope) advising them they are on the most expensive tariff (29%) or changing the name of a tariff to reflect the fact it is more expensive (37%). Popular suggestions included ‘rip-off tariff’ (24%) and ‘out of contract tariff’ (14%).

Searching and switching to a better deal can be done in minutes and consumers can save an average of £357 per year, with some households saving up to £618..

Claire Osborne, Uswitch.com energy expert, says: “Seven in ten households are paying more than they need to for their energy but most don’t even realise they’re on a poor value deal.

“Consumers are now demanding that their suppliers provide much clearer information about exactly what kind of tariff they’re on and when they could save money.

“Switching is quick and simple – with big rewards for consumers – but there are more things that should be done to grab energy customers’ attention so they realise they’re wasting money if they’re on an expensive SVT.”

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

FOR MORE INFORMATION

Tim Dunford

Phone: 020 3872 5612

Mobile: 07785 552666

Email: tim.dunford@uswitch.com

Twitter: @uswitchPR

Notes to editors

Research was conducted online by Opinium between 20th and 22nd June 2017, among 2,005 nationally representative UK adults (aged 18+) + boost sample of bill payers (Q3 onwards) (aged 18+).

  1. 66% of energy customers are on SVTs. Figure is based on 26 million customers and account data for the large and medium suppliers, stripping out double counting for dual fuel customers. 66% of 26 million customers is 17.16 million customers. [Source: Ofgem Retail Energy Markets report – 3/8/2016].

The Competition and Markets Authority estimated that the detriment from excessive prices to customers of the Six Large Energy Firms to be about £1.4billion a year on average from 2012-2015. [Source: CMA Energy market investigation final report – 24/6/2016]. Average Big Six dual fuel SVT (£1138) minus cheapest dual fuel deal on the market (£850: One Select “Secure 1 Year Fixed”) = £288. Data correct as of 29 June 2017.

  1. When asked ‘Have you heard of the abbreviation ‘SVT’ before?’, 5% answered ‘Yes – and I know what it stands for’ and 10% answered ‘Yes – but I’m not sure what it stands for.’

  2. When asked ‘Which of the following do you think best describes what an SVT is?’, 1% answered ‘energy plan.

  3. When asked ‘Are you on a Standard Variable Tariff (SVT)?’, 21% answered ‘Yes’, 52% answered ‘No’ and 26% answered ‘Not sure.’

  4. When asked “Which of the following, if any, would be the best way to encourage people to switch from expensive Standard Variable Tariffs (SVTs) to cheaper energy deals?’, 29% answered ‘Customers should receive a letter that is difficult to ignore (e.g.in a red envelope) saying that they have been switched on to the supplier’s most expensive tariff’, 56% answered ‘Energy supplier should send an annual reminder saying how much you could have saved if you’d switched to the cheapest deal on the market’, 37% answered ‘Change the name of the tariff so that it better reflects the fact that it is the most expensive deal a supplier has to offer’, 3% answered ‘Other’ and 20% answered ‘Don’t know’. Respondents were able to choose more than one suggestion.

  5. When asked ‘Has your energy supplier contacted you in the last 12 months to inform you that you could save money by moving to a cheaper deal?’, 26% answered ‘Yes’, 56% answered ‘No’ and 18% answered ‘Can’t remember.’

  6. When asked ‘Do you think Standard Variable Tariffs (SVTs) should be renamed to any of the following to make bill payers take notice that their energy supplier could have much better value tariffs on offer?’, 24% selected ‘Rip off tariff’, 9% selected ‘Emergency tariff’, 4% selected ‘Rollover tariff’, 14% selected ‘Out of contract tariff’, 3% selected ‘Other’ and 31% answered ‘N/A – SVTs don’t need to be renamed but bill payers should just be made aware of what they are signing up to.’

  7. Between 1 June 2016 and 30 November 2016, people who switched energy supplier for both gas & electricity with Uswitch saved an average of £357. At least 10% of people who switched energy supplier for both gas & electricity with Uswitch during this period saved £618 or more.

About us

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