Hello

Ofgem report reveals Big Six greed

Ofgem’s second report showing the number of UK energy customers on the standard variable tariff (SVT) has been released - and for the first time, shows how many customers have been stuck on the SVT for more than three years. A curtain up on the findings has revealed a show of greed by the Big Six, whose customer base is predominantly made up of households stuck on their most expensive tariff. We’ve calculated the exact number of customers wasting money on these tariffs to be an alarming 8.3 million (1).

A tariff that isn’t up to standard

Standard variable tariffs fluctuate in line with energy prices and as a result, are always the most expensive on the market. Because they don’t require a contract, customers who don’t shop around and switch, can find themselves on the SVT for years and in some cases, decades. Ofgem’s report found that a staggering 37% (2) of UK households are languishing on a Big Six SVT and, these energy giants like it that way. British Gas, SSE and E.ON have more than 70% (3) of their customers paying over the odds for their energy on their worst value tariff. We think it’s plain wrong that a handful of big, established players are taking so many of their loyal customers for a ride.

Take a look at the masses of customers on the SVT and the average amount they are overspending by: Ofgem report reveals Big Six greed

Capitalising on apathy

Our calculations have shown that these customers have wasted an eye-watering £3.7bn (4) over three years, on outdated, overpriced billing models. Where the Big Six might see this as loyalty, the truth, is that families just aren’t aware of how much they are overspending.

“The Big Six rely on their customers doing nothing, encouraged by confusing information and infrequent bills, and then exploit this ‘loyalty’ with higher priced tariffs.” - Ed Kamm, our UK managing director.

In stark contrast, only 2% (1) of our customers are on an SVT for three years and we communicate with these customers on a monthly basis to prompt them to switch to one of our better-valued fixed tariffs. All part and parcel of our commitment to transparency and helping people stay in control of their energy spend.

What would you do with £453?

Splash out on new TV? Book a weekend away? In more practical terms you could use that money to pay for a month’s food shop and still have money left over. £453 (5) is the average amount a family has overspent over the last 3 years on a standard variable tariff, with British Gas being the worst of the Big Six offenders.

For a breakdown of our calculations by supplier take a look at the table below:

British Gas (9)
% of Big Six customers on an SVT for more than 3 years (6) 41%
Total overspend of all 3 year+ SVT customer's vs. supplier’s cheapest tariff (7) £1,376,669,886
Total 3 year+ overspend per customer on an SVT vs. supplier’s cheapest tariff (8) £471
E.ON Energy
% of Big Six customers on an SVT for more than 3 years (6) 36%
Total overspend of all 3 year+ SVT customer's vs. supplier’s cheapest tariff (7) £405,148,754
Total 3 year+ overspend per customer on an SVT vs. supplier’s cheapest tariff (8) £325
EDF Energy
% of Big Six customers on an SVT for more than 3 years (6) 37%
Total overspend of all 3 year+ SVT customer's vs. supplier’s cheapest tariff (7) £543,253,327
Total 3 year+ overspend per customer on an SVT vs. supplier’s cheapest tariff (8) £503
Npower
% of Big Six customers on an SVT for more than 3 years (6) 38%
Total overspend of all 3 year+ SVT customer's vs. supplier’s cheapest tariff (7) £522,454,347
Total 3 year+ overspend per customer on an SVT vs. supplier’s cheapest tariff (8) £542
Scottish Power
% of Big Six customers on an SVT for more than 3 years (6) 28%
Total overspend of all 3 year+ SVT customer's vs. supplier’s cheapest tariff (7) £409,400,027
Total 3 year+ overspend per customer on an SVT vs. supplier’s cheapest tariff (8) £575
SSE
% of Big Six customers on an SVT for more than 3 years (6) 39%
Total overspend of all 3 year+ SVT customer's vs. supplier’s cheapest tariff (7) £427,755,680
Total 3 year+ overspend per customer on an SVT vs. supplier’s cheapest tariff (8) £304
Supplier % of Big Six customers on an SVT for more than 3 years (6) Total overspend of all 3 year+ SVT customer's vs. supplier’s cheapest tariff (7) Total 3 year+ overspend per customer on an SVT vs. supplier’s cheapest tariff (8)
British Gas (9) 41% £1,376,669,886 £471
E.ON Energy 36% £405,148,754 £325
EDF Energy 37% £543,253,327 £503
Npower 38% £522,454,347 £542
Scottish Power 28% £409,400,027 £575
SSE 39% £427,755,680 £304




1 https://www.ofgem.gov.uk/data-portal/retail-market-indicators

2 8.3m Big Six customers have been on an SVT for 3 years+ according to Ofgem’s report. According to the ONS, household data, as of 2016 there were 22.6m households within the UK.

3 Figures calculated from Ofgem data

4 This figure was calculated by looking at the average price difference between each Big Six supplier’s SVT and its cheapest tariff between 01/01/14 and 31/12/16, multiplied by the number of customers on the SVT for more than three years for each supplier, totalling the Big Six’s three year overspend to £3.7bn.

5 Source: Ofgem data detailing average household overspend of 3 year + Big Six SVT customers as per above chart.

6 Source: Ofgem data shows the number of customers per supplier on an SVT for more than three years, which First Utility converted into percentages.

7 These figures were calculated by looking at the average price difference between each supplier’s SVT and its cheapest tariff between 01/01/14 and 31/12/16, multiplied by the number of customers on the SVT for more than three years.

8 Figures obtained by calculating three-year overspend, divided by the number of customers on the SVT for more than three years.

9 Sainsbury's Energy is a British Gas white label company. Figures relating to British Gas are calculated by comparing its SVT to Sainsbury’s cheapest tariff.


Back to blog homepage

Need help?