Big six energy suppliers have been accused of keeping 1.5 million vulnerable and low income customers who receive a Government electricity discount on expensive standard variable tariffs.
First Utility, which is one of the biggest energy suppliers outside of British Gas, E.on, EDF, Npower, Scottish Power and SSE, has estimated that around 1.5 million people who receive the Government’s 'Warm Home Discount' scheme – which provides financial assistance to vulnerable or low income customers – are being kept on expensive standard variable tariffs by 'big six' suppliers.
If you're receiving pension credit, other means-tested benefits, or you're on a low income you may be able to access the Warm Home Discount, which is available from certain suppliers and provides £140 off electricity costs to help with winter fuel bills.
However, many big six customers who receive the Warm Home Discount are having the benefit wiped out by sky-high energy costs.
MoneySavingExpert.com has calculated that a typical user on a big six standard variable tariff is paying around £240/year more, on average, compared to the cheapest deal currently on the market.
Many of those in or at risk of fuel poverty could save £100s/year, on top of the £140 discount, if they make sure they're on the cheapest available tariff.
Check how much you could save by doing a full market comparison via our Cheap Energy Club – it’ll even tell you which suppliers are offering the Warm Home Discount this winter.
How many people are affected?
According to Ofgem, 2.2 million people receive the Warm Home Discount, and 97% of these are with one of the big six suppliers. In June, a Competition and Markets Authority investigation found that 70% of all big six customers are on expensive standard tariffs.
First Utility has subsequently estimated that 69% of all Warm Home Discount customers are on a big six standard tariff, which equates to around 1.5 million people.
What’s being done?
There’s no obligation on suppliers to move vulnerable customers to their cheapest tariffs, but pressure is building on Government and Ofgem to do more.
Frank Field MP, chair of the Work and Pensions Select Committee, has written to the Prime Minister to encourage the Government to oblige energy suppliers to place all of those eligible for the Warm Home Discount scheme on the cheapest tariff.