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Energy consumers are paying for their lack of engagement

Lucinda Beeman
Written By:
Lucinda Beeman
Posted:
Updated:
27/03/2014

Gas and electricity regulator Ofgem has referred the energy market for investigation, but comparison sites stress that there’s no magic bullet for high bills.

Ofgem’s report found “possible tacit co-ordination” and called for an investigation by the Competition and Markets Authority (CMA). But consumer groups warn that such an investigation could take 18 months.

Clare Francis, editor-in-chief at MoneySuperMarket, said: “An inquiry into competition in the energy market is long overdue but should finally settle the age old debate about whether the energy market is working correctly for consumers. However, the timescales involved means we’ll still have to wait some time for a conclusion, but this doesn’t mean customers should sit back and just wait for changes. “

According to Frances millions of people pay more than they need to for their gas and electricity simply because they don’t-or can’t-switch energy providers.

She said: “It’s not a lack of choice that’s the problem, but a lack of engagement. There is choice in the market when it comes to type of tariff and energy supplier which can mean savings of around £200 when switching to the best deal, yet the number of people making the move to a cheaper tariff is declining.”

Frances said that confusion and ambiguity leaves bill payers with little confidence and no trust in the wider energy market; according to Jeremy Cryer, energy spokesperson at GoCompare.com, this frustration is holding consumers back from finding the best deal.

Cryer explained: “In a recent survey of householders who are currently customers of the big six, almost one in five said they wouldn’t consider switching to smaller supplier, with 22 per cent saying this was because ‘all energy companies are the same’. With this general distrust of all energy companies, it’s not surprising that 12 per cent of people admitted to having never switched providers.”

According to James Padmore, head of energy at Compare the Market, a family of four could save enough money by switching to pay for a year and half’s broadband.

Frances concluded: “There are still too many barriers that stop people from switching. We would like to see a radical overhaul of the industry so it works on behalf of consumers, not against them. Making bills easier to understand, simplifying the switching process by speeding up transfers, and also adding a ‘switching guarantee’ to protect customers should things go wrong, would go some way to addressing these concerns.”


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