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Energy regulator Ofgem has revealed fresh data showing customers are overspending by around £265 by not switching from standard tariffs offered by the big six to cheaper variable tariffs.
Its latest research highlights the gap between the cheapest available fixed tariff on the market at around £900 – offered by First Utility – and the average variable tariff at around £1,165 a year.
Research by independent supplier First Utility also backs this finding, revealing that UK energy customers are overspending by a total of £3.4 million a year as 70 per cent of customers are still on standard variable tariffs offered by the big six.
First Utility, whose iSave May 2016 tariff is £899, has recently called for the variable tariff to be scrapped in favour of an ‘out of contract’ tariff with regular communication to customers on cheaper available alternatives.
First Utility’s chief customer officer Ed Kamm said: “The issue of low switching and the overspend between variable tariffs and the cheapest on the market that Ofgem highlights is costing the UK billions every year. We’ve called on the industry to scrap the variable and do more to engage consumers. Let’s call the standard variable what it is – the out of contract tariff i.e. the tariff you’re left on when you’re not on one of the good ones.”
Earlier this week independent supplier GB Energy Supply undercut its domestic retail competitors by launching the cheapest fixed dual fuel tariff in the UK at £870 ahead of 14 fixed tariffs ending this week.
Price comparison site Gocompare.com revealed that only one of the top ten cheapest fixed tariffs currently on offer is by a big six supplier, with none in the top five.
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