Survey Reveals 'Shocking' Rise In Overspend By Customers Of Big Six Energy Firms

Survey Reveals 'Shocking' Rise In Overspend By Customers Of Big Six Energy Firms
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Customers of the Big Six energy companies are paying £4 billion more than they should be because they remain on the most expensive tariffs, a study claims.

British households are overspending on their energy by an average of £293 - £59 or 25% more than last year - according to the survey by independent provider First Utility.

It found households in the East Midlands and East of England were overpaying the most, with an average £310 annual saving available to them if they switched.

Households in South Wales had seen the biggest increase in potential savings, with an extra £80 a year now available to them by switching.

First Utility said the overspending was due to more than 85% of energy customers remaining with one of the Big Six, and 70% of them staying on the most expensive standard variable tariff.

The £4 billion figure was far higher than the £1.7 billion identified by the Competition and Markets Authority (CMA) earlier this year, who said the Big Six providers had been taking existing customers - 70% of whom are stuck on standard variable rate deals - for granted.

In its long-awaited report in March, the CMA said too many customers were still on the most expensive default standard variable tariffs and could save more than £300 on average by switching.

First Utility said the research would come as "a shock" to Big Six customers, who were likely to assume they were better off following price cuts earlier this year.

Ed Kamm, First Utility's UK managing director, said: "The Big Six have been exploiting customers' loyalty for far too long and the scale of the problem has been vastly undervalued.

"Customers of the Big Six who are on their standard variable tariff are mostly unaware of the savings because their suppliers are clever about how they avoid telling them.

"We're trying to highlight those savings today because the increase in overspend since last year is shocking.

"The best thing that you can do is to shop around, get a quote and see how much you can save.

"It only takes 10 minutes and customers deserve to have the money back in their pockets."

The latest figures from Energy UK, which represents suppliers, show there were 438,166 switches in April, bringing the number for the year to date to more than 1.5 million.

The number of switches to small and mid-tier suppliers remained consistent at 43% last month.

Energy UK chief executive Lawrence Slade said: "It is great to see electricity switching is becoming more common practice among customers, with switching once again surpassing 400,000.

"This shows customers are taking advantage of the number of deals on offer from the 40 suppliers in the market, as they continue to fight for customers."

Energy Secretary Amber Rudd said: "I am on a mission to make sure everyone gets a fair deal on their energy bill. I have met the bosses of the Big Six and I have challenged them to bring down bills and pass on savings to consumers.

"However, it's not about the Big Six anymore. Thanks to Government action there are more energy suppliers to choose from than ever before, creating more competition and cheaper tariffs. If you think you are paying too much for your energy bill, I urge you to switch supplier."