Eon plots end of standard variable tariff, but is it all good news?
Eon is planning to scrap its standard variable tariff - a first for the Big Six energy giants - but it may not be as good as it sounds.
The German-owned company has said it will put all customers onto fixed tariffs, with the one catch – that they agree to have a smart meter fitted in their home that measures energy consumption in real-time, The Times reported.
However, consumers should still be wary they don't get sucked into paying over the odds at the end of their contract.
Eon announced it would offer a one-year fixed tariff with no exit fee and customers will have the option to roll over onto the latest version of a fixed-term contract.
The move was welcomed by Citizens Advice chief executive Gillian Guy, but she remained cautious.
“Eon needs to be absolutely transparent about the costs of any rolling fixed deal, and also be clear with customers about what happens when the fixed period ends.”
The standard variable tariff – not so standard
Standard tariffs are often the most expensive on the market and if you sleepwalk into one you risk paying through the nose for your gas and electricity.
Energy giants made nearly £900 million by luring customers in with cheap deals – then shifting them on to the most expensive tariffs when those initial contracts expire.
The Big Six — British Gas, SSE, Scottish Power, Eon, Npower and EDF Energy — have used discounted fixed tariffs to entice new customers to sign up.
But once the deals expire they get converted to costly standard variable tariffs.
If you sleepwalk onto one of these you could spend years paying over more than you should.
Switch and avoid paying more
Switching from one of the Big Six’s standard energy deals could save you over £300.
Remember: you don’t have to wait until your tariff has ended to switch, so get in there bright and early and save yourself some cash.
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