Some 50 gas and electricity fixed rate tariffs will have expired in the two months to the end of February 2016. Customers are supposed to be told by their supplier what is their cheapest new tariff. Yeah right…
E.on and Age UK
As the story breaks today about Age UK allegedly earning millions each year to recommend one of E.on’s less attractive tariffs, it seems – yet again – that suppliers do not want us to save money (or, at least, as much as they want to make money for themselves).
What should happen… and does
Customers nearing the end of a fixed tariff should get a letter or email telling them about the best offerings.
One MFC supporter got her communication a couple of weeks ago. Her E.on one year fixed rate tariff was costing 11.508p per electricity kilowatt hour (kwh) and gas at 3.209p per kwh.
But she was surprised to find that the new fixed rate being offered was considerably more at 14.039p for electricity and 4.039p for gas, even though wholesale prices had fallen by a third over the previous 12 months.
The other two tariffs offered were the variable rate – just a smidge more at 14.522p and 4.177p – and the Age UK two year fix at 14.049p and 4.044p.
Before she went online to renew, she checked the market and found a one year fix at Ovo at 11.287p and 2.772p. She was about to move to that UNTIL she found an E.on one year fix at 10.65p for electricity and 2.851p for gas!
How comes E.on didn’t tell her about that one?
The biggest scandal
The biggest scandal is not that Age UK gets commission from an energy supplier like the comparison websites do, but that the Big Six energy companies do not want to us to get good value.
Who would have thought that these companies – who have reduced their main tariffs by around a measly 5%, despite the fact wholesale rates have fallen so far – want to rip off their loyal customers. Well… we would.
- They like to have a good value fix on comparison websites to attract new customers but do not trumpet the cheapest tariffs.
- And when a fix ends if the customer does nothing they are moved to the general tariff.
- And they do not urge the 60% of people who have never moved tariff or company to look for better value. These are the people who bolster their massive profits.
That said, the charity had a duty of care and should have told the 120,000 customers to move to another tariff. Even better, they should have told the energy company to improve the “special” rate for the over 60s.
All the E.on tariffs on offer have the same standing charges for gas at £79.94 a year and electricity £59.94. Ovo has a standing charge of £105. These charges have to be taken into account but are not relevant for people moving to a different tariff at E.on.
- If you are on a standard rate check out the fixed rates.
- If your fix is about to end, do not expect to be told what is best for you.
- The new E.on tariff has a £60 early-exit fee but most existing fixes have much smaller penalties.