More than 800,000 households could be automatically switched onto more expensive ‘default’ energy tariffs in the last three months of 2020 if they do not switch tariff or provider when their deal comes to an end. In October, November and December 2020, there are 469 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 £100 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 £122 per household. The 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’.
The biggest hikes in energy costs could impact households whose tariffs end in December, where the average annual energy bill increase could be as much as £142. However, October could see the greatest number of customers affected, with 328,000 households estimated to be moved on to the more expensive ‘default’ tariffs if they do not switch, at a combined cost of almost £38 million.
Peter Earl, Head of Energy at comparethemarket.com, said “Being loyal to your energy supplier rarely pays. In fact, most energy firms rely on their customers not realising that they are about to default onto a more expensive tariff. The energy price cap was meant to limit the impact of rolling over onto an SVT, but clearly the cost of inertia remains high.”
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