Most UK homes remain on poor value energy bills - Ofgem

(c) Sky News 2018: <a href="http://news.sky.com/story/most-uk-homes-remain-on-poor-value-energy-bills-ofgem-11523368">Most UK homes remain on poor value energy bills - Ofgem</a>
 

A majority of UK homes remain on poor value energy bills, according to the industry regulator as a price cap looms on so-called default tariffs.

In its annual State of the Energy Market report, Ofgem said it had noted a marked shift in customers leaving the so-called 'big six' firms for smaller, independent suppliers.

The watchdog said that while that had tipped the big six - British Gas, EDF (Paris: FR0010242511 - news) , E.ON, SSE (LSE: SSE.L - news) , npower and Scottish Power - into the first fall in collective profits since 2014, there were still too many customers being failed.

It measured a 10% decline in earnings totalling £900m this year for the big six as smaller firms snapped up market share.

Ofgem said they now accounted for a quarter of the household supply sector.

However, as of April, it said 54% of homes were still on controversial default tariffs - including standard variable tariffs (SVTs) compared to 57% a year earlier.

These are bills which customers have been rolled on to when a fixed price contract ends and they have failed to either switch supplier or agree a new price.

Ofgem revealed its findings as a separate report by National Grid (LSE: NG.L - news) - which is responsible for keeping the lights on and gas flowing - showed it was "confident" there would be no energy crunch this winter.

The company said there was sufficient capacity to avoid a repeat of last winter's scare when gas prices spiked during the 'Beast from the East' weather systems after a series of breakdowns combined to hurt supplies.

Ofgem said those on prepayment meters were still the most likely to be paying over the odds for their energy.

It announced it was to take a look at the issue of self-disconnection after a survey found 10% of prepayment customers had cut off their electricity or gas supply because they did not top up their meters.

Dermot Nolan, chief executive at Ofgem, said: "We have witnessed many positive developments in energy over the last year, but the market is still not delivering good outcomes for all, especially the vulnerable.

"Ofgem has introduced the safeguard tariff which ensures that five million households, including some of the most vulnerable, pay a fairer price for their energy.

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"Price protection will be extended to a further 11 million customers on the worst deals.

"We will continue to facilitate the transformation of the energy market to ensure that benefits are captured for all consumers and ensure no-one is left behind."

Lawrence Slade, chief executive of industry body Energy UK, said: "Ofgem's State of the Market report demonstrates how the energy sector continues to transition, with increasing competition and engagement driving benefits for
consumers, with switching up, complaints down and households spending less on average of their household budget on energy than last year.

"It is also welcome to see customer satisfaction with complaints handling increasing and the number of customers on standard tariffs continuing to fall.

"And the industry is proactively taking steps to go further with a number of voluntary initiatives to improve service for customers, including the Energy Switch Guarantee which provides customers with the reassurance that switching
will be simple, speedy and safe.

"The independently-chaired Commission for Customers in Vulnerable Circumstances is also looking at how all stakeholders, including Government and industry, can improve services for those in most need."