UK has overspent £7 billion on energy tariffs in the last 3 years

Ahead of a House of Commons debate into the energy market, new data released by First Utility shows that millions of UK households have lost almost £800 each in the last three years by being stuck on a Big Six Standard Variable Tariff.

First Utility says that the overspend on energy is because 85% of energy customers are with the Big Six, and of those, 70% are on the most expensive standard variable tariff.  

With at least 55% of all Big Six SVT customers having not changed tariff in at least three years, it means that £7bn has been wasted UK-wide through higher energy bills – enough to fund 9 million families’ grocery shopping for more than three months.

Thursday’s Parliamentary debate, supported by 50 MPs across all parties, will consider solutions to help these disaffected customers and address the fact that MPs ‘deplore the Big Six energy firms’ treatment of out-of-contract energy customers on default tariffs’.  

First Utility has long called for further Government intervention to help all those who are not benefiting from greater competition. It has proposed forcing two immediate remedies:

1. Ensure  Warm Home Discount (WHD) customers are automatically moved onto the cheapest deals
2. Undertake a whole market reset and move all customers that have been on their supplier’s SVT for three years or more to their cheapest tariff

UK unaware of savings as Big Six keeps customers in the dark

Many customers are unaware they could save, in part thanks to the Big Six energy suppliers doing their best to keep their most loyal customers in the dark about savings and alternative tariffs. Many only receive a bill as little as once a quarter or even once a year.

In contrast, First Utility bills its customers every month, which includes details of cheaper tariffs, as part of its commitment to putting customers in the know about their energy spend.

Ed Kamm, UK MD of First Utility said “The Big Six have been exploiting customers’ loyalty for too long and it has to end. The brutal truth, hidden away in the CMA report, proves that the Big Six have been relying on their SVT customers for years to bolster their profits. We have to see real change in 2017, with the onus on helping those who have been kept on bad deals for years and years.”

First Utility’s latest ‘energy overspend’ map highlights the savings possible by switching from the Standard Variable Tariff. It breaks down the figures by region, county and top 100 towns and cities across the UK.

 

Regional league table of potential savings

RANK	Energy region	Household 3 yr saving compared to Big Six SVT average	Total 3 yr overspend by region
1	THE EAST	£805	£885,351,278
2	SOUTH	£807	£725,299,382
3	EAST MIDLANDS	£789	£630,081,783
4	WEST MIDLANDS	£809	£598,192,045
5	NORTH WEST	£809	£576,126,623
6	LONDON	£837	£559,023,358
7	YORKSHIRE & HUMBER	£803	£554,174,750
8	SOUTH EAST	£763	£523,021,844
9	SOUTH SCOTLAND	£756	£477,677,635
10	NORTH EAST	£783	£379,035,482
11	NORTH WALES & MERSEYSIDE	£776	£357,908,960
12	SOUTH WEST	£721	£335,176,537
13	SOUTH WALES	£766	£260,552,894
14	NORTH SCOTLAND	£775	£173,709,089

Top 100 towns league table of potential savings

RANK	City/town	Total 3 yr overspend		RANK	City/town	Total 3 yr overspend
1	London	£ 1,033,454,520		51	Reading	£ 17,886,927
2	Manchester	£ 293,677,739		52	Telford	£ 17,837,585
3	Birmingham	£ 126,704,394		53	Oxford	£ 17,255,083
4	Gloucester	£ 98,774,189		54	Blackburn	£ 16,985,975
5	Leeds	£ 85,815,439		55	Canterbury	£ 16,411,934
6	Glasgow	£ 64,439,671		56	Blackpool	£ 16,361,305
7	Sheffield	£ 63,011,256		57	Dundee	£ 16,341,113
8	Bradford	£ 60,311,182		58	Preston	£ 16,273,202
9	Stoke-on-Trent	£ 53,973,080		59	Norwich	£ 16,187,906
10	Edinburgh	£ 53,305,338		60	Isle of Wight	£ 16,140,740
11	Liverpool	£ 51,396,300		61	Slough	£ 16,106,276
12	Bristol	£ 43,934,193		62	Newport	£ 16,099,380
13	Wakefield	£ 37,203,819		63	Lancaster	£ 15,896,619
14	Cardiff	£ 37,144,037		64	Stockport	£ 15,672,141
15	Leicester	£ 37,039,198		65	Middlesbrough	£ 15,410,843
16	Wigan	£ 36,600,308		66	Ipswich	£ 15,281,016
17	Dudley	£ 36,011,783		67	Bolton	£ 14,757,479
18	Nottingham	£ 35,804,184		68	Lincoln	£ 14,618,077
19	Coventry	£ 35,579,636		69	Guildford	£ 14,447,278
20	The Wirral	£ 35,348,890		70	Cambridge	£ 14,194,491
21	Doncaster	£ 34,531,721		71	Colchester	£ 13,960,665
22	Newcastle	£ 31,200,277		72	High Wycombe	£ 13,815,095
23	Walsall	£ 30,994,012		73	Cheltenham	£ 13,268,862
24	Sunderland	£ 30,654,662		74	Exeter	£ 13,064,291
25	Medway	£ 29,742,831		75	Basingstoke	£ 12,333,019
26	Brighton & Hove	£ 29,676,076		76	Maidstone	£ 12,280,403
27	Kingston-Upon-Hull	£ 29,575,780		77	Crawley	£ 12,037,589
28	Rotherham	£ 29,379,369		78	Darlington	£ 11,803,103
29	Wolverhampton	£ 28,709,305		79	Chesterfield	£ 11,654,043
30	Derby	£ 27,928,386		80	Carlisle	£ 11,601,307
31	Southampton	£ 27,215,241		81	Worcester	£ 11,508,119
32	Swansea	£ 26,360,284		82	Mansfield	£ 11,182,492
33	Plymouth	£ 26,346,148		83	Great Yarmouth	£ 11,144,451
34	Oldham	£ 25,900,879		84	Barnsley	£ 10,425,405
35	Milton Keynes	£ 25,816,400		85	Hartlepool	£ 10,247,320
36	Aberdeen	£ 24,564,373		86	Grimsby	£ 10,076,662
37	Rochdale	£ 24,380,896		87	Stirling	£ 9,668,695
38	Swindon	£ 24,027,990		88	Kettering	£ 9,402,297
39	Northampton	£ 23,813,319		89	Bath	£ 9,119,244
40	Solihull	£ 23,787,283		90	Peterborough	£ 9,015,965
41	Portsmouth	£ 23,596,498		91	Inverness	£ 8,710,262
42	Luton	£ 23,279,537		92	Burnley	£ 8,388,705
43	York	£ 22,615,880		93	Shrewsbury	£ 8,253,048
44	Aylesbury (Vale)	£ 21,618,244		94	Stafford	£ 7,879,840
45	Stockton-On-Tees	£ 21,334,665		95	Scarborough	£ 6,875,753
46	Gateshead	£ 21,290,125		96	Wrexham	£ 6,798,725
47	Bournemouth	£ 21,079,577		97	Taunton	£ 6,631,795
48	Southend-On-Sea	£ 20,472,603		98	St Albans	£ 6,621,232
49	Chelmsford	£ 19,282,282		99	Warwick	£ 3,519,229
50	Bedford	£ 19,046,509		100	Truro	£ 1,925,880

About the figures:  March 2017: 85% of 27m homes in the UK are served by one of the Big Six energy providers (Source: Cornwall Insights). 70% of UK households served by the Big Six are on a Standard Variable Tariff (Source: CMA) and each is overpaying by average of £262 a year over the past three years at national average (Source: EHL data analysed by First Utility). The figure of £262 is the average difference over the past three years (2014-2016) between the average annual Big Six dual fuel SVT for typical usage and the cheapest widely available dual fuel tariff. Therefore the typical overspend (assuming a customer picked the cheapest tariff) is £786 over the past three years.

First Utility has used data from the Office of National Statistics to understand the number of households in each region, county and town and then applied national average data to these numbers to apportion the overspend by area.

First Utility has assumed:

• Ofgem’s medium usage figure of 3,100 kwh gas and 12,500 kwh electricity is a representative average consumption for the UK as a whole.
• 85% of all households are supplied by the Big Six according to recent data from Cornwall Insights.
• 70% of these households are on the standard variable tariff according to data from the CMA.