5m energy customers now ‘safeguarded' by capped prices – but they’re still overpaying by £100s
The energy regulator Ofgem has extended its energy price cap to another 1m customers, as it vowed to do last year
It means a total of 5m people will now come under the safety net of the capped tariff. This is designed to prevent elderly and other vulnerable people paying the highest standard variable tariff (STV).
Millions more pay for energy on this rip-off tariff, which people are automatically switched to when a fixed-rate deal ends.
However, the level of the safeguard tariff has been pushed up by rising fuel costs.
So, a typical customer will pay around £57 more for gas and electricity a year, seeing their bill climb from £1,031 to £1,089.
Ofgem sets the rate of its safeguard tariff twice a year in February and August.
Anyone using a prepay meter or who gets the Warm Home Discount will qualify.
It ensures that the price of energy per unit cannot go above a fixed level.
But people on this safeguard tariff are still overpaying …
A quick look at the market reveals that this so-called safeguard tariff is little more than window dressing.
On average people who are switched to this safeguard tariff from April when it comes on stream will save around £66 a year.
Good news, but small beer compared to the average £305 saving they could be making simply by shopping around and switching themselves to the cheapest rate on the market.
That’s according to the consumer group Which?
Alex Neill, Which? Managing Director of Home Products and Services, said: “While it’s right that help is extended to vulnerable customers, an average saving of just £66 on people’s energy bills from April makes the safeguard tariff far from the cheapest deal on the market.
“Anyone overpaying on a poor value tariff should look to switch away to a better deal immediately, as they may save up to £305 a year.
The £305 saving is based on an average user (using Ofgem average consumption figures) of 3,100 kWh electricity and 12,000 kWh gas per year.
The message is clear – you’re nuts not to spend the five minutes it takes to switch!
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