Seven in ten energy customers in Britain (17 million) are languishing on expensive deals known as standard variable tariffs (SVTs), potentially throwing away nearly £300 each but half of all customers don’t think they’re on one.
The new research from uSwitch.com, the price comparison and switching service, demonstrates a distinct lack of awareness amongst consumers, with over three quarters (85%) admitting to never having heard of the phrase ‘SVT’. When shown a list of possible phrases that it could refer to, only 1% could correctly identify SVT as an energy plan.
Once they had the term explained to them, 35% of respondents said they realised that SVTs are amongst the most expensive deals on the market, but just one fifth (21%) of customers knew for definite that they were on one while 52% of customers were sure they weren’t. Furthermore, only 26% recalled being contacted by their energy supplier in the last 12 months to inform them that they could be saving money by moving to a cheaper deal.
The majority of consumers feel that the responsibility for alerting them to changes to their tariff and possible savings should lie with their energy company. Over half of bill payers (56%) believe that energy suppliers should send an annual reminder that they could save money by switching, whilst almost a third (31%) feel that consumers should be given more information about the tariff they are signing up to.
Other initiatives that would motivate more people to switch to a better energy deal include being sent a letter that is difficult to ignore (e.g. in a red envelope) advising them they are on the most expensive tariff (29%) or changing the name of a tariff to reflect the fact it is more expensive (37%). Popular suggestions included ‘rip-off tariff’ (24%) and ‘out of contract tariff’ (14%).
Searching and switching to a better deal can be done in minutes and consumers can save an average of £357 per year, with some households saving up to £618..