Not doing anything this week could cost energy customers £186?
Everyone knows that being a lazy bones costs money in this world, but now someone's actually quantified how much extra people could end up paying just by not making a quick phone call or internet click. Using uSwitch figures, someone slipping on to a standard variable energy tariff this week if their fix ends on 30 September could end up paying £186 a year more for their energy.
Despite the ongoing investigation into whether suppliers are overcharging customers, an estimated tens of thousands of customers will be affected in the next few days as their “fixed” fuel tariffs come to an end, after which their energy firm will revert them to a more expensive “standard” rate.
It’s not surprise that standard rates are more expensive than the periodic deals offered, but taking some as examples- a ‘Value Plus’ Extra Energy customer will see price increases of £186 for customers on its “ValuePlus” fixed tariff, First Utility's "iSave September 2015" customers will pay £139 extra unless they switch to another tariff, and British Gas "discount fix September 2015" customers will be £121 down by sliding onto a standard tariff- all according to analysis by uSwitch.com
The average figures for the 23 fixed tariffs that expire on September 30 suggest that suppliers charge some customers £80 to £180 extra for the same energy used by other customers on cheaper deals- although energy firms have long lobbied to maintain the right to charge higher prices for standard tariffs, as, after all, customers can switch to the cheapest non-standard tariff if they ask to. And as we have previously suggested, the CMA has also warned that forcing suppliers to take care of those who don’t take care of their own tariffs would push up costs for all customers-its ongoing investigation found that energy firms can only afford to offer cheaper tariffs "if a proportion of customers revert to the more expensive 'standard variable' rate."
But there is (only) one firm whose standard variable rate is actually cheaper than at least one fix. Scottish Power’s one-year fix ending on Wednesday is £100 more expensive than the firms' standard rate after a 4.8% price drop in February after Government pressure. Good call if you’ve been on that one for the last 12 months...
Roger Witcomb, Chairman of the energy market investigation said “Many customers do not shop around to see if there’s a better deal out there – let alone switch. The confusing way energy is measured and billed can make comparing deals understandably daunting."
uSwitch.com calculate that the current cheapest fixed tariff the 30 September people could switch to costs £841 based on "typical" household usage, (3,100kWh of electric and 12,500kWh of gas per year) from Extra Energy- whose standard rate is the one costing the £186 more, correlating with the idea that it’s the lazy folks who compensate for the savvy switchers...