As price cuts from the Big Six come into effect this month, research by a London-based consumer association today reveals that the energy market is failing as the majority of customers are still missing out on savings of up to £400 a year.
Ahead of the conclusion of the Competition and Markets Authority’s investigation into the energy market – due to be published on 10 March – new research by Which? today reveals the recent price cuts announced by the Big Six are dwarfed by the savings customers could be making by switching to an alternative provider.
Customers on standard tariffs with the ‘Big Six’ providers would save just £30 a year, based on recently announced cuts. That’s a 5% reduction for those on a standard single fuel gas tariff and only a 2.6% reduction for those on a standard dual fuel tariff as the cuts only apply to gas, not electricity.
However, these same customers would save up to £400 a year – more than 10 times that amount – if they were to switch to the cheapest dual fuel deal on the market, or £260 if they were on a gas only tariff and switched to the cheapest deal on the market.
Government estimates only 12% of customers currently switch their gas provider.
With seven in ten (71%) gas customers stuck on standard tariffs and nine in ten (88%) households still with the Big Six, the forthcoming energy inquiry must make it easier and engage significantly more people to switch to a better deal.
A Which? spokeswoman said: “Millions of people are still paying way over the odds for their energy and levels of switching, while increasing, are still woefully low. We would urge all consumers, especially those on a standard tariff with the Big Six, to switch to a cheaper deal today.
“The stakes are high for the outcome of the energy market investigation and consumers will be expecting action to protect the most vulnerable and bring about fairer energy prices.”
Juliet Davenport, Chief Executive of independent energy supplier Good Energy, commented: “People have lost all faith in the Big Six energy companies because they have been taking advantage of loyal customers. There are better deals and higher levels of quality service to be found elsewhere.
“Independent suppliers tend to focus on better service and fairer pricing because they have to work harder to win customers from the bigger firms.”
See also: Utilita Energy cuts gas prices for the second time this year
Scottish Energy News 1 March 2016