Offline billpayers hit with £500 premium

Digitally excluded households face an energy market premium of up to £485, National Energy Action (NEA) has estimated.

The charity revealed the figure to Utility Week in response to a Citizens Advice report which urged the sector to ensure that going forward information and customer support is not solely provided online and that people can still access help and advice in a variety of non-digital formats.

Citizens Advice’s Future Energy Consumers report follows on from a two-year programme of research and advocacy on the future of the energy market, ensuring all consumers benefit from the transition.

It concluded by identifying three key issues that need to be addressed:

• Communication with consumers
• Engaging all consumers
• Regulation and consumer protection

Specifically the report raised concerns that consumers who are digitally-excluded might have difficulty setting up and using new technology or equipment in their homes. Research participants said instructions and information about home energy technology should not be exclusively provided online.

It further expressed concerns that those who face digital exclusion may not be able to use online tools to help them understand how products such as time of use tariffs would impact their energy bill.

One participant even suggested that tariff comparison “will become almost impossible” in the coming years.

According to Ofcom, 13 per cent of adults do not use the internet, while the Office for National Statistics says in 2018 there were still 5.3 million adults in the UK, or 10 per cent of the adult population, who have either never used the internet or have not used it in the last three months.

NEA says it has recently estimated a rough value for the premium in the energy market from being digitally excluded could be as high as £485.

This includes the value of the Warm Home Discount (£140, as the broader group can only access the discount online), Ofgem’s estimate of the average saving of switching away from a default tariff (£305, as those who are digitally excluded are less likely to switch) and the discount offered by some retailers for customers who opt for paperless billing (£40).

Matt Copeland, policy manager at NEA, said: “Digitally excluded households face a premium in the energy market, finding it harder to switch to cheaper deals and missing out on key support such as the warm home discount.

“It has also been difficult for them to identify, and access, critical extra help that some energy suppliers have been offering during the pandemic, without access to the internet. We must ensure that the energy market, and its products and services are inclusive, and take measures to help more people get connected.”