Customers face ‘£168 loyalty penalty’ as tariffs end

Consumers are set to be hit with a £168 average price hike as more than 100 energy deals come to an end this month, research from Look After My Bills has found.

The automated switching service said 112 deals come to an end on Sunday (30 June), meaning customers will be rolled on to their supplier’s standard tariff if they do not switch rate or provider.

Shell Energy Retail customers on the company’s Smart First June 2019 Online – Paperless tariff will see the biggest increase – at £347, or 38 per cent, according to the research.

A Shell Energy Retail spokesperson said: “The difference between the expiring tariff and the default tariff reflects the low price of the expiring tariff and the good value that these customers have had for their energy over the past year.

“Only a few customers actually move onto the default tariff, most will take a new fixed deal from us as we actively encourage all our customers to get the best tariff before their contract ends.”

Shell Energy Retail, which was  rebranded from First Utility , was recently found to have overcharged customers on its default tariffs when the price cap was introduced at the start of this year.

The company, which was trading as First Utility at the time of the breach, will pay out a total of £390,000 by compensating around 12,000 customer accounts and paying £200,000 into Ofgem’s consumer redress fund.

Top 10 price increases

In response to the research Ofgem said the price cap meant that customers were paying around £75-£100 less per year than they would otherwise be.

A spokesperson said: “The price cap ensures that consumers remain protected from being overcharged for their energy and that any increases in the level are only due to actual rises in energy costs, rather than excess charges from supplier profiteering.

“The cap has significantly reduced consumers’ bills. Our analysis suggests that on average consumers are paying around £75-100 per year less than they would be if the cap was not in place. Households who use more energy, such as large families, are saving even more.

“Consumers who want to save more money can shop around for a better deal.”

Earlier this week Look After My Bills published research which found that 2019 is on track to become the “worst year” for energy bill price rises.

It found that there have already been 42 energy price increases, compared to just 15 this time last year. Furthermore the average price rise in 2019 is £110, compared to £75 last year.

Wholesale costs are often blamed on increases to tariffs.

Meanwhile the number of customers which have switched suppliers is 2,606,747 – up 14 per cent on the same time last year according to Energy UK.

Almost half-a-million energy customers switched supplier in May, with 487,231 switching in total, a figure slightly down (1.4 per cent) compared to the same month last year.

*Energy supplier Engie disputed the original figures used in the table as it offers a “rate rollover promise”, which ensures customers are put on to the cheapest comparable tariff available at the end of their contract and the supplier does not automatically roll its customers onto its SVT.

With that in mind Look After My Bills has updated its table to reflect this.