The Business Secretary is to investigate an allegation that the 'big six' energy suppliers are making more money out of loyal customers than they're admitting to. But regardless of the outcome of the inquiry, switching your supplier is the best way to bag big savings on your energy bills.
The Sun newspaper has today reported that the 'big six' gas and electricity firms have been making profits of 24% on standard variable tariffs, despite reporting to industry regulators that they make no more than 4% profit. This information allegedly came from a leaked report from trade body Energy UK.
However, Energy UK has disputed The Sun's claims, calling them "very misleading". A spokesperson from the trade body told us the paper’s calculations were based on a version of the report that was "just a draft" and "not published".
Nevertheless, Greg Clark MP, who heads up the Department for Business, Energy and Industrial Strategy, has vowed to investigate the prices being charged by major energy providers.
He says: “I want to look into the evidence that the report contains and will ask Energy UK to meet with me to discuss its findings. This report appears to confirm my concern that big energy firms are punishing their customers’ loyalty rather than respecting it.
"Customers who are loyal to their energy supplier should be treated well not taken for a ride and it’s high time the big companies recognised this. I have made clear to the big firms that this can't go on and they must treat customers properly or be made to do so."
To be sure you're getting the best energy deal, make sure you always do a full comparison – you can use our Cheap Energy Club. See more on how to cut energy costs in our Cheap Gas and Electricity guide.
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What does Energy UK say?
A spokesperson for Energy UK says: "The Sun article is very misleading on profits being made from consumers on standard variable tariffs.
“The purpose of the report was simply to help understand how the different pressures on an average bill have changed over recent years. It was not intended to present, or to hide, how much profit different firms make across their various tariffs.
“It is not possible to use the information in the report to calculate the actual margin achieved by individual suppliers against their various tariffs."
Switch suppliers to avoid paying over the odds on your energy bills
The focus of The Sun's report is on the costs of standard variable tariffs provided by the large energy suppliers.
However, even if you aren’t on one of these tariffs it's always worth making sure that you're getting the best possible deal available.
You can find more about how to save a bundle by switching by checking out our Cheap Energy Club.