CMA Reveals Yet Another Reason For You To Switch Your Energy Supplier
A recent investigation by the Competition and Markets Authority (CMA) has revealed that 95% of dual-fuel tariff customers could have saved significant amounts if they had switched within the last year.
The research, which began in the summer of 2014, has unveiled a startling (yet perhaps not so surprising) discovery about the nature of the Big Six energy firms. It shows how customers who have been with their supplier for longer are probably losing out to new customers on the good deals…not to mention being charged more for their energy bills.
Possible savings range between £158 and £224, which could have been made by switching one’s energy supplier in the last twelve months.
But because so few are keen about keeping up to date with the latest tariffs, they’re more likely to be spending more on keeping their homes warm.
Launched in response to Ofgem’s claims last year that the Big Six were dominating the energy market, CMA will base the next stage of its investigation on their tendency to quickly increase prices when wholesale prices rise, but hesitate to bring them down when costs decrease.
Although CMA has disclosed that it doesn’t think a division of the Big Six will be necessary, Energy Minister Ed Davey has said he “would not flinch from taking this tough action”, should the decision occur.
Are You a ‘Sticky’ Customer?
CMA’s research brings the focus primarily to customers on standard variable tariffs, who never think about switching. Many of these were ‘inherited’ by energy companies after the energy industry became privatized in the 1990s.
Customers who have never switched their energy supplier have the most to gain, experts say. CMA’s figures show that between 40-50% of electricity customers have been with their supplier for more than 10 years. For one supplier in particular, it was 70%.
CMA referred to this particular segment of customers as “more likely to describe themselves as struggling financially”. It also noted that they are less likely to own their own home or have access to the internet. By their calculations, they are also more likely to be disabled or a single parent.
The CMA is now going to investigate whether or not Ofgem’s decision to simplify tariffs has “done more harm than good”. It has also highlighted the poor customer service being shown by the Big Six, with a substantial increase in complaints between 2007 and 2013 orienting around bad customer service; billing errors and payment trouble.
Energy Tariffs You Should Switch To
If you’ve managed to define yourself as a ‘sticky’ customer (you’ve been with your energy supplier between 5-10 years) then its time to listen up. Switching is easy, and if you don’t have online access, it can be done over the phone.
Gas and oil prices are around 27% lower than their equivalent price a year ago, and wholesale prices have fallen to a two-year low. Therefore, the time is perfect for customers to break out of their energy rut and start taking advantage of the savings to be had.
According to The Telegraph’s Kate Palmer, the top tip for 2015 is to stick with Fixed tariffs. Not only will you get cheaper energy, you’ll also benefit from protection against price hikes. Also, work on reducing your power usage in the months leading up to winter, to make up for the increased usage you’ll no doubt experience come October.
The Top 5 Fixed Energy Deals Right Now
Be sure to check the best tariffs for you using the online uSwitch comparison tool.