NEARLY 250,000 HOUSEHOLDS FACE AN AVERAGE £166 HIKE IN ENERGY BILLS IN MARCH

Published: 10/03/2021
  • 182 fixed rate tariffs are ending in March 2021, which could affect nearly 250,000 customers
  • Average increase in energy bills could hit £166 a year per household
  • Total cost to households around the country could be nearly £41 million if people do not switch and are rolled onto their supplier’s default tariff for the year

10 March 2021 – Nearly 250,000 households could be automatically switched onto more expensive ‘default’ energy tariffs in March if they do not switch tariff or provider when their deal comes to an end.

In January, there are 182 fixed energy tariffs coming to an end, according to new research by comparethemarket.com. Rolling off fixed term deals onto default tariffs could collectively cost UK households over £41 million a year compared to their current energy costs.

Analysis of the fixed tariffs ending during these months finds that the average increase to energy bills could be £166 per household. comparethemarket.com’s data and analysis reveal that if customers do not switch when their fixed tariff ends, energy companies are set to benefit from a huge ‘inertia windfall’.

Month

Est. number of customers affected

Total cost to consumers

Number of tariffs ending

Average increase

March

247,199

£41,104,729

182

£166.28

Households that do not switch before April also face an additional increase to their bills. Ofgem, the energy regulator, recently announced that the default energy price cap will change from its current level of £1,042, to £1,138. The increase of £96 includes an additional £23 that the regulator has allowed suppliers to recuperate from unpaid bills from households that have experienced financial difficulty during the pandemic.

Separate research from comparethemarket.com’s Household Financial Confidence Tracker shows that annual energy costs would only have to rise by an average of £85 in order to tip households with children at home into financial difficulty.

Peter Earl, head of energy at comparethemarket.com, said:

“Households that do not switch when their fixed tariff ends very often face a significant increase to their energy bills, as they will be automatically moved to their supplier’s higher priced standard tariffs. Added to this, the decision to increase the price cap will potentially add another £96 on average to the bills for those on standard tariffs from 1st April. If you are coming to the end of a fixed term period with your energy supplier, it’s the right time to take action and see if you can get a better deal by moving to another provider.

“The impact that the pandemic is having on many people’s finance is becoming particularly stark, and as our latest research shows, the price cap increase is likely to push a number of households, particularly those with children at home, further into financial difficulty.”

In order to help people avoid rolling onto a standard variable tariff (SVT), comparethemarket.com customers can set up a savings alert and let AutoSergei do the legwork. Having signed up once to this service, customers will receive regular alerts when a cheaper tariff becomes available to them, as well as getting a notification when their fixed deal is about to expire.

ENDS

Methodology

All data has been secured through comparethemarket.com and data supplied by a third party Energyhelpline. The total number of households is calculated using comparethemarket.com customer numbers and extrapolated using its estimated market share. The cost to consumers is then a multiplication of the number of customers affected and the difference between the fixed tariff and the default tariff of that provider annualised. Please note, this analysis excludes a number of tariffs for which comparethemarket.com cannot currently determine a clear end date.

Notes to editors:

About comparethemarket.com

comparethemarket.com was launched in 2006 and has grown rapidly over the past fifteen years to become one of the UK’s leading price comparison websites.

comparethemarket.com provides customers with an easy way to make the right choice for them on a wide range of products including motor, home, life, travel and pet insurance as well as utilities and money products such as credit cards and loans.

comparethemarket.com actively works with its brand partners to help provide great services to customers.

comparethemarket.com is a trading name of Compare The Market Limited. Compare The Market Limited is authorised and regulated by the Financial Conduct Authority for insurance distribution (FRN: 778488) and is registered with the Financial Conduct Authority under the Payment Services Regulations 2017 (FRN: 911617) for the provision of payment services.