Millions of householders are missing out on the most competitive prices by failing to switch energy suppliers, with a report by the competition regulator highlighting how poorly existing customers are treated.
In an update on its long-running inquiry into the fairness of the domestic energy market, the Competition & Markets Authority said that 95% of consumers on dual-fuel contracts (people who buy their gas and electricity from the same provider) would be better off if they switched tariffs. The savings could be worth more than £200 a year.
What is particularly striking about these figures is that people who are on dual-fuel deals have already switched in the past – if they hadn’t, they would still be getting both types of fuel from different providers. So the findings by the CMA show that even the more savvy consumers are struggling to find the best deals.
Jeremy Cryer, of Gocompare.com, said: “Sadly, in the UK energy market, loyal customers continue to get the poorest deal. If you are on a standard tariff and haven’t switched for a number of years, you will undoubtedly be paying more than you need to.
“The truth is, the price war that has driven the cost of the very cheapest dual-fuel tariffs down dramatically in the last 12 months could be saving hard-up consumers hundreds of pounds, but it has passed many by.”
Ann Robinson, of Uswitch.com, said: “This announcement underlines why the energy market has been referred to the CMA for investigation.
“We are pleased that the CMA is looking at ways to help energy consumers on expensive standard tariffs reduce their bills. These customers have paid over the odds for their energy for far too long now, and it seems they have not benefitted fully from the recent reductions in wholesale costs.
“The number of people switching supplier has hit rock bottom and so the key to the outcome of this investigation will be how to increase levels of consumer engagement in the market. If more of us shopped around, suppliers would have to up their game through lower prices and better customer service to attract and retain customers.”
Energy regulator Ofgem referred the issue to the CMA last year, and this report is just the latest update from the authority.
Juliet Davenport, chief executive of Good Energy, a small rival to the so-called Big Six providers, said: “We welcome this latest stage of the CMA inquiry. This is an opportunity to transform the energy market so that it works for the benefit of consumers, not just the old suppliers. Better competition means more choice.”