Warnings raised over energy bill shock for thousands
Analysis by the price comparison site found that 157 fixed energy tariffs are due to expire at the end of May. Thousands of households on those tariffs face seeing a substantial increase in their energy costs at this point, as they will be rolled onto their supplier’s standard tariff.
The research found that the average household who moves from one of the expiring tariffs onto their supplier’s default deal will end up paying a whopping £279.96 a year extra for the same energy use, collectively costing those households an incredible £61m.
Peter Earl, head of energy at comparethemarket.com, said: “Each month hundreds of thousands of households risk falling onto a standard variable tariff which means many end up paying more than they should do. Energy companies are the only ones to benefit.”
Standard variable tariffs are the most expensive tariffs operated by energy suppliers. It’s because they are such a rip off that the energy price cap was introduced, in a bid to limit how badly suppliers can milk those customers who do not switch tariffs after their initial deal comes to an end.
The price cap was increased back in April to £1,138 per year for the average household, a jump of £96. This was down to a combination of the greater demand for energy, which had pushed up wholesale prices, as well as to support energy suppliers who have had some customers who were unable to pay their bills due to the Covid-19 pandemic.
However, even with the cap in place, a standard tariff works out at significantly more expensive than the price you would pay if you switched to a new fixed tariff. According to the latest data from Ofgem, the energy regulator, the average of the 10 cheapest tariffs on offer last month came to £914 per year, a substantial saving.
Earl added: “The good news is that customers do not have to take these price increases lying down. It takes very little time to put your details in and find a new deal that could potentially save you hundreds of pounds.”
You don’t have to switch yourself
Price comparison sites are a simple place to start when looking for a new energy tariff, but they are not your only option. In fact, you can actually task some firms with shopping around on your behalf.
Auto-switching firms will compare energy tariffs for you each year and move you to a new, cheap tariff to ensure you do not end up moving onto your supplier’s standard tariff. You will be notified of a proposed switch, so you can object ‒ for example if you’ve had a bad experience with a supplier in the past and don’t want to use them for your energy ‒ otherwise the switch will take place and you’ll move to the new tariff.
These sites don’t charge users for this service, instead being paid a commission fee by the energy supplier you move to, in much the same way that price comparison sites earn money when you use them to switch tariffs.