13.5m homes missing energy savings

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Published: Monday 16th February 2015 by The News Editor

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Some 13.5 million households in the UK are losing out on a total of £2.7 billion by not switching energy suppliers, it has been revealed.

The “ugly truth” of the energy market is that most Britons are overcharged and those who shop around could save around £200 a year.

But experts said “paltry” price cuts from the Big Six energy companies mean customers have been given “false confidence” they are on a decent deal.

The £2.7bn is based on analysis of 2014 energy bills collected from the Department of Energy & Climate Change’s (DECC) Domestic Fuel Inquiry, which collects information on customer numbers by tariff. This data was compared with that from switching sites to find the cheapest possible deal.

The figures have been revealed as the Government launches its major new Power to Switch campaign to encourage the public to change suppliers.

It comes amid mounting criticism that the Big Six firms are ripping off customers and failing to pass on the benefits of the collapse in oil prices.

Wholesale gas prices have tumbled by around 20% since December according to reports, but the biggest energy firms have only cut prices of their standard gas tariff by between 1.3% and 5.1%.

Money Saving Expert Martin Lewis said: “We need to shout loud about the benefits of switching tariff. Too many people think energy firms are ‘all the same’. That’s far from true, there are huge differences on both price and customer service.

“The worry is that news of recent price cuts, even though they were paltry, will have given many false confidence that they’re on a decent deal. Examine the figures and the ugly truth is very different.

“Even after price cuts, someone on a Big Six supplier standard tariff with typical use will pay £1,158 a year, whereas switch to the cheapest tariff and they’d pay just over £900 a year.

“So it’s worth people taking 10 minutes to see if they can save themselves £250 – at an hourly rate of £1,500 if someone else was offering this to you as work, would you turn it down?”

Ed Kamm, chief customer officer at First Utility, the largest independent energy provider, backed the campaign.

He said: “The Big Six’s recent price cuts gave savings of less than £30 to those customers on their standard variable tariffs, yet switching to the cheapest deals on the market could save you £260 on average.

“Whilst these price cuts hogged the headlines there is a real danger that customers are being lulled into a false sense of security, thinking they are benefiting from a good deal when they simply aren’t.

“To put it bluntly: if you’re on a standard variable tariff with the Big Six, you’re paying too much, whether they have made a price cut or not.

“Energy prices are at their lowest point for four years so now, but only for those who seek out the best deal so we urge everyone to see if they can save.”

Launching the campaign, Energy and Climate Change Secretary Ed Davey said: “When it comes to switching, the power is in people’s hands to get a better deal and save.”

The Power to Switch campaign, launched today, encourages people to switch supplier and save money by visiting www.BeAnEnergyShopper.com.

Energy expert Emma Bush, from USwitch, said millions are paying over the odds for their energy.

She said: “DECC’s campaign to encourage households to shop around is to be welcomed.

“If more of us switched from expensive standard tariffs to cheaper deals, suppliers would work harder to attract and retain customers with lower prices and better customer service.

“This is why we have called on the Competition and Markets Authority to look at how to increase levels of consumer engagement in the market, as an essential way to boost competition and reduce bills.”

Published: Monday 16th February 2015 by The News Editor

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