13.5m homes overpaying for energy

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Some 13.5 million households in the UK are losing out on a total of £2.7 billion by not switching energy suppliers, it has been revealed.

The "ugly truth" of the energy market is that most Britons are overcharged and those who shop around could save around £200 a year.

But experts said "paltry" price cuts from the Big Six energy companies mean customers have been given "false confidence" they are on a decent deal.

The £2.7bn is based on analysis of 2014 energy bills collected from the Department of Energy & Climate Change's (DECC) Domestic Fuel Inquiry, which collects information on customer numbers by tariff. This data was compared with that from switching sites to find the cheapest possible deal.

Switch energy supplier

The figures have been revealed as the Government launches its major new Power to Switch campaign to encourage the public to change suppliers.

It comes amid mounting criticism that the Big Six firms are ripping off customers and failing to pass on the benefits of the collapse in oil prices.

Wholesale gas prices have tumbled by around 20% since December according to reports, but the biggest energy firms have only cut prices of their standard gas tariff by between 1.3% and 5.1%.

Money Saving Expert Martin Lewis said: "We need to shout loud about the benefits of switching tariff. Too many people think energy firms are 'all the same'. That's far from true, there are huge differences on both price and customer service.

"The worry is that news of recent price cuts, even though they were paltry, will have given many false confidence that they're on a decent deal. Examine the figures and the ugly truth is very different.

"Even after price cuts, someone on a Big Six supplier standard tariff with typical use will pay £1,158 a year, whereas switch to the cheapest tariff and they'd pay just over £900 a year.

"So it's worth people taking 10 minutes to see if they can save themselves £250 - at an hourly rate of £1,500 if someone else was offering this to you as work, would you turn it down?"

Search for a cheaper energy deal

Ed Kamm, chief customer officer at First Utility, the largest independent energy provider, backed the campaign.

He said: "The Big Six's recent price cuts gave savings of less than £30 to those customers on their standard variable tariffs, yet switching to the cheapest deals on the market could save you £260 on average.

"Whilst these price cuts hogged the headlines there is a real danger that customers are being lulled into a false sense of security, thinking they are benefiting from a good deal when they simply aren't.

"To put it bluntly: if you're on a standard variable tariff with the Big Six, you're paying too much, whether they have made a price cut or not.

"Energy prices are at their lowest point for four years so now, but only for those who seek out the best deal so we urge everyone to see if they can save."

Launching the campaign, Energy and Climate Change Secretary Ed Davey said: "When it comes to switching, the power is in people's hands to get a better deal and save."

The Power to Switch campaign, launched today, encourages people to switch supplier and save money by visiting www.BeAnEnergyShopper.com.

10 simple ways to keep your house warm this winter
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13.5m homes overpaying for energy
Of course you should make sure the doors and windows are shut properly, but you should also check each one for draughts too. A good old fashioned draught-excluder will stop the wind whipping under the doors, and draught-proofing strips around doors and windows should see off the worst of the chills.
It's not the kind of DIY job that anyone loves, but a quarter of the heat in your home is lost through the roof, so it makes a big difference. Once you've insulated the loft, the roof space will be colder, so make sure you have insulated any water pipes and tanks, and draught-proofed the loft hatch.
If you have thicker curtains, ideally with a thermal lining, you're likely to lose 25% less heat through the window. It's also worth considering curtains over external doors, to prevent heat from escaping. However, make sure you draw them back during the day to make use of any glimmers of sunshine we get.
If you don't have a working chimney but you do have an open fire, then you'll be losing heat through the chimney. If you place a chimney balloon in the chimney and inflate it, it will trap the warm air in.
If you stick the sofa in front of the radiator you'll waste a fortune keeping the back of the sofa warm.
Many people will remember elderly relatives applying tinfoil in a hap-hazard manner years ago, but it doesn't have to be noticeable, and will reflect half the heat back into the room.
Bare, varnished floorboards have been popular for a while, but unless they are carefully filled and draught-proofed, you can lose 10% of your heat through the floor. If filling the floorboards is impractical, a carpet may be a simple solution.
There's no point in heating any rooms you don't use, so turn off radiators in unused rooms, and heat the rooms you tend to occupy instead. Once the spare room gets chilly, you'll need to keep the door closed, and use a draught-excluder to stop the chill spreading.
If your kitchen is the heart of the home you don't need the house so warm during dinner time, because you can use the warmth of the oven to keep you all toasty. Get some baked potatoes in the oven, some soup on the hob, and no-one will notice the rest of the house has grown a little cooler.
It may seem a bit Victorian, but having a woodburner in the fireplace allows you to burn a cheap fuel, and enjoy the heat without the smoke. Burning wood costs less than gas and two thirds less than electricity, so you can stay toasty for less.

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