First Utility accuses big six of overcharging customers by £4bn per year

First Utility has condemned the big six energy suppliers for “overcharging” customers by as much as £4 billion per year, more than double the £1.7 billion figure suggested by the Competition and Markets Authority (CMA).

First Utility claimed in March that energy customers were overcharged by £3.4 billion a year. However, fresh analysis by the independent supplier has suggested a further £600 million savings are now available UK-wide.

It said the overspend is due to more than 85 per cent of energy customers being with one of the big six, with 70 per cent of those being on the standard variable tariff, and “not taking advantage of saving money by switching supplier”.

The research included all UK energy suppliers, and found that the difference between the cheapest and most expensive tariffs has increased by 25 per cent to £293, compared to £234 in 2015 with the biggest overall savings to be made in the South and South East – in excess of £560 million.

Households in the East Midlands and East of England are paying the most, according to the figures, with a potential £310 annual saving.

MAP: energy bill overspend by region

Source: First Utility

First Utility managing director Ed Kamm said: “The big six have been exploiting customers’ loyalty for far too long and the scale of the problem has been vastly undervalued.

“Customers of the big six who are on their standard variable tariff are mostly unaware of the savings because their suppliers are clever about how they avoid telling them.”

The CMA investigation into the energy market showed an estimated national overspend with the big six energy firms of £1.7 billion, with an upward trend year-on-year reaching around £2.5 billion in 2015.

The final remedies from the CMA to resolve this and increase consumer engagement in the market are expected next month.