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Energy firms charging customers extra £93 to pay by cash

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Energy customers who pay their bill by cash or cheque face a hefty penalty for doing so, research shows.

The average difference between a pay on receipt of bill compared to a monthly direct debit bill is £87 a year.

However, the largest difference between payment options comes from Utility Warehouse, which charges customers £93 a year to pay on receipt of bill, according to auto-switching service Migrate.

All ‘Big 6’ suppliers – British Gas, npower, SSE, ScottishPower, E.ON and EDF Energy – charge pay on receipt of bill customers £86 a year more than those who pay by monthly direct debit.

According to the Office for National Statistics (ONS), 2.6 million people over the age of 75 didn’t use the internet at all in 2018, meaning those who pay a premium are the people least empowered to do anything about it.

George Chalmers, chief executive of Migrate, said: “It’s become abundantly clear that consumers can’t reply on the price cap to protect them against rising energy bills and the only way to ensure that they’re getting a good deal is to vote with their feet and migrate supplier.

“However, with limited access to the internet, those who could stand to benefit the most from doing so also face the biggest barrier to switching.”

The energy price cap was first introduced by Ofgem at the start of this year to give customers on pricey standard or default tariffs a better deal.

The cap is a maximum price companies can charge a typical dual fuel customer on a standard variable tariff, with most suppliers choosing to set their tariff prices around the absolute limit.

It is updated every April and October to take into account the varying costs of wholesale energy.

Despite the cap, households can save hundreds of pounds by switching from a standard variable or default tariff to a more competitive fixed or variable rate tariff.

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