Household Bills
New energy plans could cost consumers £55m
New plans to cut the cost of energy bills could leave consumers paying over the odds for gas and electricity, Which? has warned.
Regulator Ofgem announced proposals in February to reform energy tariffs. However, analysis from Which? reveals that under the current plans consumers could end up paying £55m more than they need to on their bills.
The regulator has proposed a Tariff Comparison Rate (TCR) to simplify energy tariffs and allow consumers to compare the price of different tariffs across the market.
Under these new complex proposals consumers will be advised on their best deal based on medium usage of both gas and electricity.
However, only a quarter of Brits use this level of energy, resulting in three quarters of people being advised on a deal not based on their actual usage, Which? said.
The research found around 500,000 low energy users, who tend to be on the lowest incomes, could be mis-directed to the wrong tariff.
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With energy tariffs notoriously difficult to navigate, the watchdog is calling for the introduction of a single unit price for energy tariffs, in the same way petrol prices are displayed, to enable consumers to easily compare prices and find the best deal for them.
Richard Lloyd, executive director at Which? said: “Rising energy bills remain one of consumers’ top financial concerns yet six in 10 of us have never switched supplier as people are left baffled by the vast array of complicated tariffs.
“These current proposals are far too complicated and will fail to achieve their aim of making it easier for people to find the best deal, with three quarters of people being asked to compare prices that are not based on their energy usage.
“The Government should introduce single unit prices for each energy tariff so people can easily see the best deal for them at a glance. Only then will people have the confidence to switch, injecting much needed competition into the broken energy market.”