Member Article

UK consumers overpaying £1.7bn per year for gas and electric

A report released today by the Competitions and Markets Authority (CMA) has shown that consumers are paying more than £1.7bn per year than they should be on their energy bills.

The data, which looked at the years 2012 to 2015, is part of a report by the CMA which has looked into whether consumers are being ripped off by the ‘Big Six’ energy suppliers.

The report also accused the UK’s energy companies of taking ‘existing domestic customers for granted’, in particular those on standard tariffs, the ‘default’ tariffs by energy companies which have no fixed end date.

Following the release of the report, Roger Witcomb, Chairman of the energy market investigation, commented: “We have found that the six largest suppliers have learned to take many of their existing domestic customers – some 70% of whom are on ‘default’ standard variable tariffs – for granted, not just over prices, but with their service and quality.

“Yet in those parts of the retail markets where competition is working, customers are benefiting to the tune of hundreds of pounds a year by switching. We’re proposing a wide range of bold, innovative measures to enable competition to grow further across the market so that millions more households will benefit.”

The findings also show that consumers on prepaid meters, a group which contains some of the most vulnerable people in society, were perhaps the most hard done by of all as they have fewer tariffs and have less opportunities to switch suppliers.

He added: “Energy is both an essential and expensive item for many of these 4 million households, whose cheapest tariffs are around £300 more expensive than for other customers.

“That’s why we’re proposing a transitional price control for them which will remain in place until 2020, by which time they too will be able to benefit from our measures, and from other future developments like the roll-out of smart meters.”

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →