Energy charges for loyal customers “treble”

Never switched your gas supplier at home? You could be paying up to £90 more than people who have switched. New analysis from thinktank IPPR published earlier this week suggests […]

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By Vicky Ellis

Never switched your gas supplier at home? You could be paying up to £90 more than people who have switched.

New analysis from thinktank IPPR published earlier this week suggests energy companies charge customers they kept from their time as monopoly suppliers more money than new ones.

What’s more this “surcharge” for customers who stuck with the same supplier trebled between 2010 and 2013, jumping on average from £26 to £76.

The electricity bills for 2013 of customers who haven’t switched supplier since the market was opened to competition are on average £27 higher than for customers who have switched.

While gas bills in 2013 for customers who have not switched supplier are on average £76 higher than for customers who have switched.

Analysts claimed this shows competition is “failing” in the energy markets ahead of a review into this issue from regulators, expected this week.

Reg Platt, IPPR Senior Research Fellow said: “These customers pay more for their energy than they need to. It also means smaller suppliers are at an unfair disadvantage because they have not inherited any customers and must compete against the low prices that the big companies offer to people who have switched.”

He said Ofgem hasn’t taken enough action and must correct this with the competition report: “The outcome of the new competition review due to be published this week cannot be simply more of the same. It’s time that the market was radically reformed so that small energy service companies, local authorities, communities and individuals can all become active players in the energy market.”