95 per cent of energy customers could save money if they switch providers, finds CMA

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19th February 2015 14:42 - Utilities

An investigation by The Competition and Markets Authority (CMA) has discovered that customers of big energy companies could have saved money if they had switched providers.

The inquiry, which has been investigating the energy market since the summer of 2014, has found that in the period from 2012 to 2014, a massive 95 per cent of dual-fuel customers of the big six did not switch energy suppliers, and so missed an opportunity to save money.

The amount they could have saved varied between £158 and £234 per year.

The Competition and Markets Authority’s inquiry was initiated by a referral from Ofgem, as a result of the energy regulator’s worries that the industry is being dominated by the big six providers. The big six currently account for 92 per cent of the energy supply market in the UK.

The big six are:

  • SSE,
  • Scottish Power,
  • Centrica,
  • RWE Npower,
  • E.On,
  • EDF Energy

The Competition and Markets Authority’s inquiry identifies millions of customers, as ‘sticky’. These customers were gained by the big energy company following the privatisation of the industry in the 1990s.

The inquiry found that a large proportion of ‘sticky’ customers, who are on variable tariffs, barely ever switch energy companies and as a result, miss the chance to save money.

Of electricity customers, between 40 per cent and 50 per cent have been with the supplier for more than a decade.

When looking at the demographic of these customers, The Competition and Markets Authority identified them as "less educated, less well-off, more likely to describe themselves as struggling financially, less likely to own their own home, less likely to have internet access, more likely to be disabled or a single parent and more likely to think switching is a hassle, that there are no real differences between suppliers and that something may go wrong if they switch ".

95 per cent of energy customers could save money if they switch providers, finds CMA

 

 

 

 

 

 

 

 

 

 

 

Source: BBC News

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