One in four customers on a Standard Variable Tariff feel in the dark about energy bill rises

Days before the energy price hike and many customers are trying to find ways to prepare themselves. Yet over a quarter (27%) of those on Standard Variable Tariffs say they have not seen any communication from their supplier about price rises[1], according to new research from Uswitch.com, the comparison and switching service.

Nearly 80% of households are now on Standard Variable Tariffs, including prepayment meter customers, up from 60% just before the energy crisis started[7], and they will all be directly impacted by the increase of the price cap on 1st April.

The price cap was introduced three years ago, but there is still some confusion among customers about what it means for them, with 14% of bill-payers wrongly believing the price cap is decreasing this week, when it is actually rising. This confusion is particularly strong among younger consumers aged 18 to 34, with a third (32%) believing the price cap is going down[8]. 

Almost half of surveyed bill-payers (47%) also mistakenly believe the price cap is the maximum amount they will pay for energy[2] - even though 30% were quoted above the cap figure when their personal consumption was used to calculate the prediction[3]. The price cap actually limits standing charges and the unit cost of energy. Meanwhile, a quarter (25%) believe the price cap changes just once a year[8].

Customers are still looking for fixed deals as one way to escape the price cap. Over a third of customers (35%) were offered a fixed deal by their supplier when they were contacted about upcoming increases to their bills[4]. One in four bill-payers (24%) were offered a tariff costing more than £2,000, and half of those offered a fixed tariff decided to take one[4]. 

Since January this year, one in three surveyed energy bill-payers (30%) have taken or considered taking a fixed deal, despite the majority of tariffs costing more than the price cap. In the same period, 15% of bill-payers decided to sign up for one[5]. 

Consumers who have seen a notification from their provider feel they have been kept well-informed about upcoming price hikes, with a third (33%) saying the information provided was clear, and 23% believing it came in a timely manner. Just under a quarter (23%) felt their supplier explained what they could do if they struggled to pay their bills, and 15% said it helped them budget for price rises[9].

In total, three quarters of bill-payers (75%) have made changes to their lifestyle and taken steps to prepare for energy price rises and ease the struggle of rising costs. A third (36%) have turned their thermostat down, and a quarter (24%) have had to cut back on non-essential spending (24%)[6]. 

Other popular ways of reducing energy use in the home include turning appliances off at the wall, a method tried by a quarter (25%) of consumers, while 23% have used their washing machine less and and 21% have run it at a lower temperature. Another 15% have swapped their lightbulbs to more energy efficient LEDs, while 13% have started taking showers rather than baths, and 13% are using devices on eco modes[6].

Uswitch is providing advice on how to prepare for the rise in energy prices including taking a meter reading on 31 March to make sure your use before then is charged at the cheaper rate. The Uswitch Quick Checker offers personalised information about your energy plan and a recommendation of what you should do.

Justina Miltienyte, energy policy expert at Uswitch.com, said: “Consumers are going to see significant increases in their energy bills in a few days’ time and many are trying to figure out what it means for them and what they can do to reduce the impact. 

“It is hard to prepare for the shock of energy bills rising by 54% on average, but it is more important than ever that people stay engaged with the energy market and sign up to alerts to inform you when better deals become available.

“There are still a few more days to go until the price rises kick in, and there are actions you can take to make sure you feel prepared for the upcoming increases. 

“Start getting into good energy saving habits now while it is warmer and your overall usage will be lower, which will stand you in good stead for the winter when you need to turn the heating back on.

“You can run cooler cycles on your washing machine, turn devices off at the walls and switch off lights when they are not in use to save energy. 

“If you are eligible for the council tax rebate in April, make sure you keep an eye out for it and keep the money somewhere safe so you can put it towards your energy bills.

“If you are worried about getting into debt, get in touch with your provider as soon as possible, as they can help you find a solution.”

FOR MORE INFORMATION

Prisca Simango

Phone: 07971 093 512

Email: prisca.simango@rvu.co.uk

Twitter: @UswitchPR

Notes

Research conducted online by Opinium, 18th-23rd March 2022, among 2,000 UK energy bill-payers, weighted to be nationally representative.

1. Respondents were asked ‘Do you understand the following statements about the energy price cap to be true or false?’ To ‘The price cap is decreasing next time it changes’, 14% said it was true, 66% said it was false and 20% did not know. 14% of 28.1 million UK households = 3.9 million households. This rose to 32% for respondents aged 18-34.

2. Respondents were asked ‘Do you understand the following statements about the energy price cap to be true or false?’ To ‘The price cap is the maximum possible amount your bill can reach’ 47% said it was true, 32% said it was false and 21% did not know. 

3. Respondents were asked ‘ From the email or letter you received, how much are you PREDICTED to spend on electricity and gas each month after 1 April 2022?’ 30% said they were predicted to be spending £2,000 or more a year. 

4. Respondents who had been contacted by their supplier were asked ‘When you were contacted by your supplier about your rising bills, did they offer you a new fixed deal?’ 18% said yes and they signed up to it, 18% yes and they did not sign up to it, 57% said no. Respondents who were offered a fixed deal were asked ‘How much was the total annual cost of the fixed deal you were offered?’ 24% of respondents said the deal was worth £2,000 or more. 

4. Respondents were asked ‘Have you been recently contacted by your energy provider letting you know if and how your bills will change from 1 April 2022?’ 53% said yes, 40% said no. 68% of people on SVTs said yes, 27% said no. 

5. Respondents were asked ‘Since 1 January 2022, have you, or are you considering, taking out a fixed energy deal?’ 15% said Yes - I have already signed up for one, 14% said Yes - I am planning to sign up for one, 50% said no, 21% said they don't know.

6. Respondents were asked ‘What, if anything, have you done to prepare for the rise in the price cap?’ 36% said they turned the thermostat down, 25% said they turned appliances off at the wall, 24% said cut back spending on clothes, entertainment etc, 23% said they used the washing machine less, 21% said they cut back on spending on leisure activities, 21% said they ran the washing machine at cooler temperature, 19% turned the heating off entirely, 15% upgraded light bulbs to LEDs, 13% started taking showers instead of baths, 13% used devices on their ‘eco modes’, 12% used dishwasher less, 11% started using microwave instead of oven, 8% started eating fewer hot meals. 

7. Ofgem - August 2021 price cap, and Ofgem - February 2022 price cap 

8. Respondents were asked ‘Do you understand the following statements about the energy price cap to be true or false?’ To ‘The price cap changes once a year’ 25% said it was true, 43% said it was false, 32% did not know. 

9. Respondents were asked ‘Which of the following best describes the communication you received from your energy provider on expected price rises?’ 33% said It’s been clear, 23% said It came in a timely manner, 23% said It explained what to do if I struggle paying my bills, 19% said It’s confusing, 15% said It has helped me budget for price rises, 13% said It came too late for me to do anything about it. 

About Uswitch 

Uswitch is one of the UK’s top comparison websites for home services switching, including broadband, mobiles, SIM Only and insurance. We’ve saved consumers over £2.5 billion off their bills since we launched in September 2000.

In 2022, Uswitch launched its free mobile app, Utrack, to help consumers manage their home energy costs. By connecting to their smart meter, users can track their energy usage hourly, get dynamic insights and calculate potential savings with handy tips. 

Uswitch is part of RVU, a global group of online brands with a mission to empower consumers to make more confident home services, insurance and financial decisions.