Over 300,000 households face £66 energy bill hike

More than 300,000 households could be automatically switched onto more expensive ‘default’ energy tariffs in February if they do not switch tariff or provider when their deal comes to an end according to new analysis by comparethemarket.com

In February, there are 167 fixed energy tariffs coming to an end with the average annual cost of a fixed rate energy tariff ending in February is £918. Rolling off fixed-term deals onto default tariffs could collectively cost UK households over £20 million a year compared to their current energy costs.

Analysis of the fixed tariffs ending in February finds that the average increase to energy bills could be £66 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’.

Households that do not switch before April face an additional increase to their bills. Ofgem, the regulator, recently announced the default energy price cap will change from its current level of £1,042, to £1,138, for dual fuel typical consumption households. The increase of £96 includes an additional £23.69 that the regulator has allowed suppliers to recuperate from unpaid bills from households that have experienced financial difficulty during the pandemic.

Peter Earl, Head of Energy atcomparethemarket.com, said “Time and time again we see people fall into the inertia trap. If you do not switch your supplier at the end of your fixed term it is almost certain that you will end up paying more for your energy than you should be.”

“With most people back at home due to coronavirus restrictions, energy consumption is likely to be much higher than usual, with bills increasing as a result. Those in a position to switch should consider doing so, as it will help reduce the overall amount you pay for energy and ensure you are getting better value for money.”

Month	Est. number of customers affected	Total cost to consumers	Number of tariffs ending	Average increase
February	300,602	£20,069,392	167	£66.76