The voice of serious concern has been raised in parliament stating six major UK energy suppliers punish consumers for loyalty.
MPs have started a debate last week stating the big energy firms often switch the customers on to more expensive deals with variable rates after their lower agreed tariffs expired. This is being done without the customers’ being informed of the change. Energy suppliers tend to do that on a regular basis, making the “rip off” tactics a systematic practice in the business.
This sort of exploitation does not happen in any other industry, noted John Penrose, with the long term customers suffering much higher energy bills compared to new customers.
Former Tory minister introduced a “relative price cap” scheme with the aim to protect the most loyal consumers of leading energy suppliers. The proposed solution will regulate transfer to a new tariff which cannot be more than 6% more expensive than the last one.
Energy price rises cannot be justified in any other way than for a big profit margin
According to energy regulator Ofgem, there was no reason for the energy prices to raise due to the way key players in energy industry hedge when buying energy. Despite that, leading companies made the following rates changes in the recent months:
- NPower – 9.8% increase now in place
- British Gas – price freeze only till August
- E.ON – 8.8% charge increase from April
- SSE – price decisions to be made end of March
- EDF – 1.2% overall price increase for December last year
The medium sized suppliers followed the suit:
- Good Energy – up by 11%
- First Utility – 9.7%
- Utilita – 2.9%
- Co-operative energy – up by 5%
- Ovo Energy – up by 1.5%
The factor that adds to the disappointment in this regard, is that it was the loyal customers that paid the most for the sake of wealth growth of the main energy firms.
A recent research of GB energy markets has discovered that between 2012 and 2015 customers had paid nearly £1.5bn a year in “excessive tariffs”. Consumers on standard variable tariffs (the non-switchers) paid about 11% more for their electricity and 15% more for their gas than those on other tariffs (energy shoppers). That means about 70% of the total customers were overcharged by energy providers who switched them on to more expensive standard variable deals.
MPs on a quest to control the energy market and protect consumers.
Penrose, Labour’s Caroline Flint and SNP’s Patricia Gibson put an emphasis on the need for the customers being treated fairly by energy suppliers. She noted consumers find it difficult to stay on top of the persistent changes to their tariffs. Leading busy lives, they face a very likely risk of overpaying for their gas and electricity usage.
Supported by 50 colleagues from different parties, MPs urged the Government to address the issues of out of control energy prices and respond to the fact that six major UK energy suppliers punish consumers for loyalty. So far, a six year campaign for fair rates has witnessed a pattern of energy prices shutting up in winter and lowering slightly in summer leaving a healthy margin for the energy companies to enjoy. The pattern had no relation to a wholesale energy prices of the current market.
Theresa May’s promise to help the less well-off could start with agreeing to a new program of a “protected tariff”, a temporary price lock for customers on standard variable tariff to keep their bills calculated accurately and fairly.
As six major energy companies punish consumers for loyalty, the customers are offered alternative solutions.
While MPs are fighting to implement a price cap on standard variable tariffs, consumers can protect themselves from being overcharged by a £100 a year extra right now.
Only 15% of consumers actively look for a better energy deal. The overwhelming 85% of households are still on SVTs rates despite of years of privatisation and freedom to choose a preferable provider. This may be due to a number of factors, with lack of easy guides and tools as the main reason.
MyEnergy was introduced to help people browse through the energy market and escape the ever growing gas and electricity bills in three easy steps. With MyEnergy cleverly designed to retrieve the latest information, consumers are now able to quickly switch to a cheaper tariff without the hassle they may think this could cause.
Switching energy supplier is currently the only solution to protect yourself from money grabbing energy tycoons that have no regard for the welfare of households of the UK.
Go to MyEnergy and start saving money now.