UK households are being overcharged by as much as £140 a year for energy because of the big six gas and electricity suppliers’ refusal to pass on wholesale price falls, it was claimed this week. But if you are one of the millions of gas and electricity users not locked into a deal – in other words, you are on your supplier’s standard tariff – switching now will give you the best savings for a decade, in many cases over £300.
As chancellor George Osborne this week called on big British companies to pass on the benefits of the 50% collapse in oil prices to customers, petrol retailers have been accused of being slow to respond at the pumps. Now the spotlight is increasingly falling on the big energy suppliers – none of whom have cut the standard tariffs paid by the overwhelming majority of UK households.
Price comparison websites say wholesale gas and electricity prices have fallen by around 30% and 15% respectively since the summer, which has enabled the small suppliers to offer new customers dual-fuel annual bills below £900 for the first time in recent memory.
But loyal customers, on a standard tariff, haven’t seen any price reductions. If that’s you, you are overpaying by at least £250 a year.
The average big six standard tariff customer – the place where all customers get moved to when they come off a previous deal – is paying £1,186 a year for both gas and electricity if they pay by direct debit, and a whopping £1,265 if they don’t.
This week, customers in the East of England – the cheapest region – are being offered average dual-fuel tariffs a shade under £900 a year by Co-operative Energy, Flow Energy and First Utility.
First Utility cut prices for the eighth time in the last 12 months – heaping more pressure on the big six.
Ironically, the threat of a price cap by a future incoming Labour government has repeatedly been used as an excuse for failing to pass on cuts.
TheEnergyShop.com’s Joe Malinowski says that a “price freeze only works for consumers in a rising market”. The companies’ fear is that they will cut prices, only to have them frozen as wholesale prices recover.
• To find the best deal try our impartial energy bill comparison service at Guardianenergycomparison.co.uk, or call our experts on 0800 634 3874 (Mon-Fri 9am-8pm, Sat-Sun 9am-5pm).
