Energy customers ‘overpaying by £2.2bn annually despite price cap’

Energy customers on standard deals with major suppliers may be paying £220 more a year than they need to typically, according to analysis.

Renewable energy supplier Bulb said the Big Six energy suppliers have been bunching their tariffs around the energy price cap when it is updated.

Consumers could be left out of pocket when the charges are compared with cheaper tariffs, it said.

It said there are nearly 10 million Big Six customers on standard variable tariffs (SVTs). This includes customers of British Gas, SSE, E.ON, EDF, Npower and Scottish Power.

Bulb said this means that collectively, these households could be losing out on £2.2 billion in annual savings.

Based on typical electricity and gas use, Bulb compared what Big Six customers on SVTs could have paid compared with the average of the 10 cheapest deals available to make the findings.

Hayden Wood, co-founder and chief executive of Bulb, said: “We’ve always supported the price cap – it has helped families who have been overcharged on their energy for years.”

But he said the cap is being treated by some “as a target and not a limit”.

A spokesman for regulator Ofgem said: “People who are protected by the price cap are paying a fair price for their energy and, according to our analysis, are always between £75 to £100 better off.

“The legislation also requires Ofgem to set the price cap at a level which allows efficient suppliers to offer cheaper deals for the more than 10 million customers who have switched to fixed deals.

“We’ve done this, which is why there are great value deals below the level of the cap on the market and record switching rates.

“We encourage those who remain on default deals who want to save even more money to shop around for one of these deals.”