Government WRONGLY tells 10 million people to switch energy tariff – many of them vulnerable
Ten million people are being wrongly advised by the Government to switch their energy tariff at a time when a crisis in the energy market means it would cost them hundreds of pounds to do so, MoneySavingExpert.com can reveal.
Many of the people receiving the information are vulnerable but, despite being contacted by MSE about the error, the Government is unapologetic and continues to send out the advice.
The Department for Work and Pensions (DWP) has posted out letters with incorrect and financially damaging wording on the reverse of the envelopes that encourages people to switch their energy tariff in order to save "an extra £290". People were then told to contact Citizens Advice for more information.
The letter is being sent to 10 million people who are likely to be eligible for Winter Fuel Payments, an annual tax-free payment to help older people with their gas and electricity bills. They've not all gone out and the DWP would not confirm how many of the 10 million envelopes had already been sent out, but insists it will keep sending them with the same wording despite our alert.
An unprecedented spike in energy prices, however, has meant that switching tariffs right now would cost users up to 30% more and leave them seriously out of pocket as all the cheapest deals in the market have been pulled.
Here's what's on the envelope
An MSE reader shared an image of the message on the reverse of the envelope they received from the DWP:
Martin: 'The Government knowingly mailing out an incorrect message to many vulnerable people is simply wrong’
MoneySavingExpert.com founder, Martin Lewis, said: "We are in an extreme energy bill crisis. The logic of how to manage bills has been turned on its head. There has never been a time when clarity of message and action is more important. That’s why the Government mailing out an incorrect message to millions of people, including many of the nation’s most vulnerable, is too big a risk to take.
"The right move for most people right now is to DO NOTHING - don’t switch. That's because if you do nothing, you’ll either be on, or automatically moved to your provider's default standard variable tariff, which is priced capped. The price cap forces energy firms to sell energy at below its cost price – there is no meaningfully cheaper option.
"Due to the obvious hit to their finances, many big energy providers are trying to persuade people to move off those tariffs to fixed deals at premiums often far higher than 30%. They are using all the marketing tricks in the book to do it, and playing on the fact that until now that has been the right option.
"This is why this back of the envelope message, which seems to confirm that switching is the right move, is so dangerous – it adds a halo to the message from the energy firms to get people to switch.
"Of course no one wants to see paper wasted. Yet these envelopes could be held for the future, when hopefully things get back to normal. To use them now, and therefore putting out a damaging message when many people are already struggling with bills, is simply wrong.”
The envelopes were created before the energy price hikes, the DWP says
When contacted by MSE about the error, the Department for Work and Pensions said the "latest batch of 10 million envelopes was created before the rise in energy prices" and that it would have been "impractical, costly and wasteful" to replace them.
MSE also alerted Citizens Advice to the mistake and it said it has subsequently asked the DWP to fix the error.
A spokesperson from the DWP said: “This is an initiative that has been in place for a number of years to encourage switching and the latest batch of 10 million envelopes was created before the rise in energy prices. The message is simply a suggestion.
“It would’ve been impractical, costly and wasteful to replace the 10 million envelopes with new ones, and crucially it would potentially compromise our ability to make millions of Winter Fuel Payments before Christmas.”
The DWP would not confirm how many of the 10 million envelopes had already been sent out.
Households are currently unable to save money by switching and would in fact lose out heavily as the energy crisis means there are no tariffs cheaper than the energy regulator's cap. Households are instead better off rolling onto their supplier's standard tariff as then they'll be protected by Ofgem's price cap until April next year.