Big Six pair ‘poor value’ on tariffs

SSE and British Gas account for more than half of all customers on maligned SVTs

Energy giants SSE and British Gas account for more than half of all customers on poor-value standard variable tariff (SVT) deals, Ofgem has found.

SSE has come at the bottom of the regulator’s new league table ranking the 10 largest suppliers, with 71% of its customers still on the expensive deals.

The table shows that SVTs are still around £300 more expensive than the cheapest deals on the market.

British Gas ranked second from the bottom, with 67% of its customers on SVTs.

Of the 10 largest firms included in the table, the three with the smallest proportion of customers on SVTs are all independent – First Utility (23%), Ovo Energy (28%) and Co-Operative Energy (35%).

Ofgem said the decline in the overall number of customers on these tariffs is accelerating thanks to record switching rates this year.

As of the end of September, 57% of customers who are not protected under Ofgem’s pre-payment safeguard tariff were on standard variable tariffs compared with 59% in April.

However, the regulator said suppliers still need to do more to help them get a better deal.

Some large suppliers have announced plans to use new Ofgem rules to roll customers automatically on to fixed default deals instead of an SVT as part of wider initiatives to phase out the tariffs.

But Ofgem said while such moves were “a step in the right direction”, they must lead to inactive customers “genuinely benefiting from a significantly better deal, and not just being put on a rebranded poor-value tariff”.

Meanwhile, Ofgem announced a further extension to its safeguard tariff to more vulnerable customers on standard variable and default deals to protect them from overpaying for their energy for next winter.

From February, one million vulnerable households will be covered by Ofgem’s safeguard tariff and Ofgem is proposing to extend this to another two million before next winter.

Ofgem chief executive Dermot Nolan said: “Ofgem’s league table shows which suppliers have the most work to do to get all their customers a better deal.”

Alot of pressure as been heaped on the big energy companies of late. Since unscrupulous selling practices were unearthed, industry regulator Ofgem has worked hard to scrutinise the activities of utility firms more closely than ever. Still, however, consumers may be getting a raw deal. Research has revealed more than half of all customers with SSE and British Gas are on poor value “standard variable tariff” deals.

These companies are among the largest players and one might have hoped they would be doing more to hang on to their customers in what is an increasingly competitive marketplace.

A league table released by Ofgem shows standard variable tariffs are around £300 more expensive than the cheapest deals on the market.

The study also revealed that a far higher proportion of customers with smaller, independent companies were likely to enjoy better tariffs.

Such statistics should act as a wake-up call for the traditional “Big Six” suppliers, who take their dominance for granted at their peril.

Competition in the marketplace can only be good news for consumers.

After all, trust is not easily won – and once lost may never be regained.