Britain’s two biggest energy firms have been shamed by watchdogs for having the most customers on rip-off tariffs.
Some 67 per cent of British Gas non-meter customers are on its expensive standard variable tariff (SVT).
The tariff is some £284 a year more expensive than the cheapest deal on the market from a rival.
And SSE, which is second biggest supplier, has 71 per cent on its SVT. These customers are paying £315 a year more than the cheapest deal.
Details were revealed by the energy watchdog, Ofgem, who said some energy firms are not doing enough to encourage customers on the SVT to move to a better tariff.
Some 67 per cent of British Gas non-meter customers are on its expensive standard variable tariff. The tariff is some £284 a year more expensive than the cheapest deal on the market from a rival
The findings provide powerful new evidence to support the Government’s proposal to impose a cap on the SVT.
The ‘Big Six’ energy companies – British Gas, SSE, E.ON, EDF, Npower and Scottish Power – say there is no need for an SVT cap because competition between suppliers is increasing and more families are shopping around.
The official figures from Ofgem paint a very different picture with millions of households on expensive SVT deals for years.
Looking at the big six, SSE has 71 per cent of non-prepayment meter customers on the SVT; it is 67 per cent for British Gas, 61 per cent for E.ON, 52 per cent for EDF, 48 per cent for Npower, and 41 per cent for Scottish Power.
Ofgem chief executive, Dermot Nolan, said: ‘Our league table shows which suppliers have the most work to do to get all their customers a better deal.
‘It is unacceptable that so many are still paying too much for their energy.’
The energy watchdog has imposed a cap on tariffs for customers with prepayment meters. It is working with the Government on its plans for a wider cap on SVTs.
SSE, which is second biggest supplier, has 71 per cent on its SVT. These customers are paying £315 a year more than the cheapest deal with other providers
Mr Nolan said: ‘In the meantime, we will continue to press suppliers to get all their customers a better deal.’
The managing director of home products and services at Which?, Alex Neill, said: ‘Progress in moving millions of households off expensive standard tariffs has been painfully slow. Energy companies shouldn’t be waiting for the price cap, they need to do more to help their customers now.
‘People overpaying on a poor value tariff should look to switch away to a cheaper deal immediately, as they may save up to £312 a year.’
Earlier this week, a senior executive at the British Gas parent company, Centrica, admitted the company could have done more to encourage customers on an SVT to switch.
Details were revealed by the energy watchdog, Ofgem, who said some energy firms are not doing enough to encourage customers on the SVT to move to a better tariff
The managing director UK Home at Centrica, Sarwjit Sambhi, told the Business, Energy and Industrial Strategy (BEIS) Committee that the group needed to engage more with SVT customers.
‘We haven’t done enough over the last three years,’ he admitted.
Last year the Competition and Markets Authority (CMA) published the results of an investigation which found people on SVTs are collectively overpaying by some £1.4billion a year.
Mr Sambhi said: ‘After the CMA report, we had to look in the mirror and see what it is we haven’t been doing with respect to engagement. There’s a lot more that we can do.’
He said the company would look at the frequency it contacts customers, adding ‘perhaps the answer is that we could be contacting our customers once a month’.
Energy companies are making plans to scrap the SVT in favour of a new rolling annual default tariff, however critics say this may well be no better
Energy companies are making plans to scrap the SVT in favour of a new rolling annual default tariff, however critics say this may well be no better.
SSE said: ‘While some customers tell us they like the flexibility that SVTs offer, for other customers they have become less popular.
‘That’s why we recently announced that from April 2018, we will stop automatically rolling customers on to SVTs when they come to the end of their fixed-term contract. Instead customers will be rolled on to an equivalent or cheaper tariff with fixed prices for 12 months with no exit fees.
‘SSE is committed to maintaining the direction of travel away from SVTs and wants to be part of the solution.’